ITAT Quashes Old Regime Tax Demand After Income Tax Portal E-Filing glitches Blocked Form 10-IC Submission

The Tribunal quashed the order taxing the company under the old regime due to technical issues in filing Form 10-IC and directed income to be taxed under the New Tax Regime (Section 115BAA) after a fair hearing.

The appeal had been filed by a company named Uday Infrastructure International Private Limited, in the ITAT Ahmedabad, against the Income Tax Officer (ITO). Through the appeal, the company challenged an order dated July 08, 2025, passed by the DDL. Commissioner of Income Tax/JCIT (Appeals), Thiruvanantpuram, for the assessment year 2021-22.

The assessee is a private limited company. On February 17, 2022, it filed a belated return for the assessment year 2021-22, declaring the total income of Rs. 27.07 lakh. The assessee chose taxation under Section 15BAA, which is the new regime of taxation. In ITR Form No. 6 in Clause (e), the assessee clearly opted for taxation under the New Tax Regime under Section 115BAA, however unable to furnish Form No. 10-IC due to technical glitches in the e-filing portal. As a result, the return was taxed under the Old Tax Regime and demanded tax thereon.

On this action of CPC, the assessee argued that through Circular No. 19/2023 dated October 23, 2023, the CBDT has already extended the due date for furnishing Form 10-IC till January 31, 2024, for the assessment year 2021-22. But, when the time the assessee attempted to furnish Form 10-IC for AY22, an error page on screen displayed, “no multiple Form 10-IC can be filed.” As a result, on October 17, 2022, the assessee uploaded Form 10-IC for the assessment year 2022-23 with Acknowledgement No. 729095900171022 and produced a copy of the same.

When the Tribunal heard the arguments from both sides, it concluded that it was not the fault of the assessee; the technical problem prevented the assessee from filing Form 10-IC for the Assessment Year 2020-21. Therefore, on grounds of violation of natural justice, the tribunal quashed the order passed by the lower authorities and directed the assessee to furnish Form 10-IC for the Assessment Year 2021-22 before the Jurisdictional Assessing Officer and also the JAO to tax the assessee’s income under the New Tax Regime (u/s. 115BAA) after giving the assessee a fair chance of hearing. Which to these directions, it means the appeal has been allowed for statistical purposes.