Procedural Lapses Cannot Override Substantive Tax Benefits: ITAT Nagpur on Delayed E-Verification
In a significant judicial pronouncement, the Income Tax Appellate Tribunal (ITAT), Nagpur Bench, has clarified the hierarchy between substantive statutory compliance and procedural authentication processes under the Income Tax Act 1961. The tribunal ruled that an assessee cannot be deprived of the concessional tax rates under the new tax regime solely due to a delay in the e-verification of their Income Tax Return (ITR), provided the return itself was filed within the statutory deadline.
The ruling in the matter of Rajiv Madhaorao Khobragade Vs ITO underscores the principle that technical glitches and procedural delays in the authentication process should not act as a barrier to claiming legitimate statutory benefits, especially when the primary obligation of filing the return on time has been fulfilled.
Factual Matrix of the Dispute
The dispute originated from the income tax filings for the Assessment Year (A.Y.) 2023-24. The assessee, an individual, computed a total income of Rs. 21,98,660 for the relevant period. While preparing the return, the assessee made a conscious decision to opt for the alternative tax framework outlined under Section 115BAC of the Income Tax Act 1961. This new tax regime offers lower applicable tax rates in exchange for the assessee relinquishing various standard deductions and exemptions.
To secure this benefit, the law mandates that the option must be exercised and the return must be furnished on or before the due date specified under Section 139(1). For the assessee's category, the statutory deadline for A.Y. 2023-24 was 31.07.2023.
The assessee successfully uploaded the return on the official e-filing portal on 27.07.2023, generating acknowledgment no. 726415070270723. The tribunal records also noted that the relevant information regarding the choice of the new tax regime was furnished on the portal by 29.07.2023. In either instance, it remained an undisputed fact that the primary filing occurred well before the 31.07.2023 deadline.