Section 115BAC Benefit Survives Belated Return Filing if Form 10-IE Was Submitted in Time: ITAT Delhi Rules

Case Overview

Case Name: Aarti Sachdev Vs ITO (ITAT Delhi)
Appeal Number: ITA No.1763/Del/2026
Date of Order: 24/08/2026
Assessment Year: 2024-25
Forum: Income Tax Appellate Tribunal, Delhi

Background and Context

A recurring tension in income tax administration has been whether procedural defaults — particularly delays in filing returns or prescribed forms — should be allowed to override an assessee's substantive right to opt for a concessional tax regime. The ITAT Delhi addressed this question directly in Aarti Sachdev Vs ITO, delivering a ruling that reinforces the principle that procedural requirements under Section 115BAC of the Income Tax Act, 1961 are directory in nature, not mandatory.

The decision draws upon a consistent line of coordinate bench rulings and holds that where an assessee has filed Form 10-IE within the prescribed due date, the mere fact that the return of income was submitted belatedly cannot, by itself, be grounds to deny the benefit of the new concessional tax regime.

Facts of the Case

The assessee filed her return of income for Assessment Year 2024-25 declaring a total income of Rs. 4,96,400/-, opting for taxation under the new regime provided by Section 115BAC of the Income Tax Act, 1961.

Form 10-IE, which is the prescribed form through which an assessee exercises the option to be governed by the new tax regime, was filed on 31.07.2024 — that is, on or before the due date stipulated under Section 139(1) of the Act.

However, the return of income itself was filed belatedly on 13.01.2025, after the Section 139(1) deadline of 31.07.2024 had passed.

Processing and Dispute

When the return was processed under Section 143(1) of the Act, the Central Processing Centre (CPC) determined the assessee's total income at Rs. 8,59,770/- as against the declared figure of Rs. 4,96,400/-. The benefit of Section 115BAC was denied, resulting in the higher income computation.

The assessee filed a rectification application under Section 154 of the Act before the AO-CPC, which was rejected vide order dated 25.07.2025. A second rectification application met the same fate, being rejected on 22.08.2025.

Proceedings Before Lower Authorities

AO and CPC Position

The CPC declined to grant the benefit of the concessional regime under Section 115BAC, maintaining that the return of income had not been filed within the due date under Section 139(1) of the Act, and accordingly processing the return at the higher income figure.

First Appellate Authority — Addl./JCIT(Appeals)-2, Pune

The assessee challenged the denial before the Addl./JCIT(Appeals)-2, Pune, whose order dated 18.02.2026 was passed under Section 250 of the Income Tax Act, 1961.