The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has quashed an adjustment disallowing a deduction of ₹13.59 lakh after finding that the taxpayer had filed his income tax return within the prescribed time but could not e-verify it promptly because of technical glitches on the portal.
The bench of Justice (Retd.) C.V. Bhadang, President, and Arun Khodpia (Accountant Member) observed that the principle applied in cases involving marginal delays in electronically verifying returns was equally applicable to the taxpayer’s case, even though the delay in e-verification was approximately one month.
The dispute concerned Assessment Year 2024–25. The taxpayer had filed his return of income on July 25, 2024, opting to be assessed under the old tax regime. However, the return was e-verified only on August 25, 2024.
The CPC treated the return as a belated return filed under Section 139(4) of the Income Tax Act. Consequently, it denied a deduction of ₹13,59,600 on the ground that the taxpayer had not exercised the option to opt out of the new tax regime within the prescribed due date.
Under Section 115BAC, the new tax regime operates as the default regime. A taxpayer seeking to be assessed under the old regime must exercise the relevant option within the statutory time limit. The CPC concluded that since the return had not been completed through timely e-verification, the option under Section 115BAC(6) had not been exercised within the due date.
The CPC’s error message stated that a taxpayer was required to file the return within the due date to exercise the option under Section 115BAC(6) for opting out of the new tax regime. It further stated that deductions or allowances unavailable under Section 115BAC would be disallowed where the return was not filed within the prescribed time.
The Commissioner of Income Tax (Appeals) upheld the CPC adjustment through an order dated August 25, 2025. The taxpayer subsequently approached the ITAT.
Appearing for the taxpayer, the authorised representative submitted that the return had been filed on July 25, 2024, which was within the statutory deadline. The return, however, could not be e-verified because of technical glitches on the income tax portal.
The representative relied upon the return acknowledgement number, whose last six digits reflected the date of filing as July 25, 2024. It was argued that a delay caused by technical problems in completing e-verification could not convert an otherwise timely return into a belated return under Section 139(4).
The taxpayer also produced an email dated March 15, 2025, showing that the return had been filed on July 25, 2024 and e-verified on August 25, 2024. The email attributed the delay in verification to technical glitches.
The Revenue contended that the taxpayer could not wait until the last date for filing the return and subsequently complain about technical difficulties. It maintained that a return could be regarded as duly filed only after its e-verification and that, in the present case, verification had occurred beyond the prescribed deadline.
After examining the material, the Tribunal accepted that the return had been filed on July 25, 2024 and that the delay in its e-verification was attributable to technical glitches.
The ITAT relied on the Pune Bench’s ruling in ITO v. Kumar Builders Project Pune Pvt. Ltd., where the return was filed before midnight but its acknowledgement was generated two seconds after midnight. In that case, the Tribunal had directed that the original return be treated as having been filed within time under Section 139(1).
The Bench also referred to the Ahmedabad Tribunal’s decision in The Khedbrahma Taluka Primary Teachers Co-operative Credit Society Ltd. v. ADIT, which involved a delay of four minutes and 42 seconds. Another decision of the Chennai Bench in Tenovia Solutions Pvt. Ltd., involving a delay of 12 minutes and 31 seconds, was also noted.
The Tribunal acknowledged that the delays involved in those earlier decisions were substantially shorter than the one-month delay in the present case. However, it held that the underlying principle laid down in those rulings remained relevant and applicable.
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