The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, ruled that due to an error made by the tax consultant, the income tax return was processed under the old tax regime. As a result, the tribunal allowed the appeal. The taxpayer was facing a demand of INR 1.23 lakh.
The taxpayer, Mr. Shah from Ali Asker Road, Bengaluru, submitted his ITR under the new tax regime and reported a total income of Rs 32.55 lakh. However, Mr Shah’s consultant had inadvertently submitted Form No. 10-IEA, which opted him out of the new tax regime.
The taxpayer-appellant said that this was a mistake by his consultant during routine compliance operations and was not intentional. The ITR of Mr Shah indicates his decision to remain in the new tax regime instead of the old one.
This ITR was processed by the Centralised Processing Centre (CPC), Bengaluru, under the old tax regime on January 29, 2026. With this, the applicant was liable to Rs 1.23 lakh in additional tax. The Commissioner of Appeals (CITA) dismissed all claims to nullify this mistake of the consultant, because of which the present appeal was before the ITAT.
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Mr Varun S, the counsel, represented Mr Shah and won this case. The tribunal assessed Mr Shah’s conduct and the filed ITR to verify the legitimacy of his choice to remain under the new tax regime. The tribunal said that the ITR is a statutory document through which a taxpayer reports income and estimates tax payable and the regime. In Akshay Nitin Malu v. ITO (2025), reliance was placed.
Subsequently, the order of the CIT(A) was quashed, and the AO was asked to process the return u/s 115BAC(1A) to recompute the tax liability. ITAT, Section 202(4) of the Income Tax Act, 2025, read together with Rule 136 of the Income Tax Rules, 2026, provides the option to choose the Old Tax Regime.
| Case Title | Adit Nilesh Shah Vs the Deputy Commissioner of Income Tax |
| Case No. | ITA 2152/BANG/2026 |
| For Petitioner | Shri. Varun S AR |
| For Respondent | Sri. Ganesh R Gale, Standing Counse for Department |
| Bangalore ITAT | Read Order |
