2 weeks ago
Delhi ITAT Grants Relief After Tax Regime Filing Error
A taxpayer’s return showed that her accountant selected the wrong tax regime.
The form said she used the old regime, but the calculations were made using the new regime.
The tax-processing centre followed the old-regime selection.
This created a higher tax bill for the taxpayer.
She asked for the mistake to be corrected, but that request was rejected.
The case eventually reached the Delhi ITAT.
The tribunal said a taxpayer should not face extra tax because of an accountant’s clerical error.
It ordered the tax officer to calculate the liability using the new regime.
The ruling also reminds taxpayers to check their filed returns carefully.
A Delhi ITAT ruling allowed relief to Sanjay Sharma, legal heir of late Divya Kala Sharma, for assessment year 2024-25.
An accountant mistakenly selected the old tax regime in the filed ITR, although the tax computation used the new regime under section 115BAC.
The Centralised Processing Centre processed the return under the old regime and raised a higher tax demand.
The taxpayer’s rectification request was rejected before the dispute proceeded through the National Faceless Assessment Centre and to the tribunal.
The ITAT said the taxpayer could not be made liable for higher tax because of the accountant’s clerical mistake and directed recomputation under the new regime.
- Who
- Sanjay Sharma, legal heir of late Divya Kala Sharma, and the Delhi Income Tax Appellate Tribunal.
- What
- The tribunal granted relief after an accountant incorrectly selected the old tax regime while the return’s calculations used the new regime.
- Where
- The dispute proceeded through the Centralised Processing Centre in Bengaluru, the National Faceless Assessment Centre, and the Delhi ITAT.
- When
- The case concerned assessment year 2024-25; it was heard on 4 August 2026 and pronounced on 15 September 2026.
- Why
- The incorrect regime selection caused the return to be processed under the old regime, producing a higher tax demand.
Taxpayer’s Position
Tax-Processing Position
Which regime should apply?
Taxpayer’s Position
The taxpayer argued that the return’s tax computation clearly used the new regime and that the old-regime selection was only an accountant’s clerical error.
Tax-Processing Position
The Centralised Processing Centre processed the return according to the old-regime selection recorded in ITR-1, resulting in a higher demand.
Responsibility for the mismatch
Taxpayer’s Position
The tribunal held that the taxpayer should not bear higher tax solely because the accountant made an uploading mistake.
Tax-Processing Position
The taxpayer’s rectification request was rejected during the initial processing stage, requiring further proceedings before relief was granted.
Key facts
- Assessment year
- 2024-25
- Incorrect selection
- The accountant indicated the old tax regime in ITR-1.
- Actual computation
- The tax liability was computed under the new regime, under section 115BAC.
- Initial processing
- The Centralised Processing Centre, Bengaluru, processed the return under the old regime.
- Procedural path
- The taxpayer sought rectification, then challenged the matter before the National Faceless Assessment Centre and the Delhi ITAT.
- Tribunal direction
- The Assessing Officer was directed to compute the liability under the new tax regime.
- Case details
- ITA No. 5309/Del/2026; heard on 4 August 2026 and pronounced on 15 September 2026.
Quotes
Delhi ITAT bench
The Delhi Income Tax Appellate Tribunal bench comprising Accountant Member M. Balaganesh and Judicial Member Sudhir Kumar
“In our considered opinion, the assessee cannot be fastened with the tax liability for mere clerical error committed by her accountant”
livemint.com
Sources
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