In a recent Delhi ITAT ruling, a taxpayer received relief after an accounting error led to filing ITR-1 under the old regime even though the tax had been computed under the new regime.
What happened
The taxpayer’s adviser selected the old regime in the ITR-1 form, but the computation of tax used the rates and slabs of the newer regime. The mismatch prompted questions on the proper basis for assessment.
Tribunal’s direction
The ITAT directed the Assessing Officer to recompute the taxpayer’s liability under the regime actually used for the tax calculation, i.e., the new regime, rather than the regime indicated on the return.
- The ruling acknowledges that clerical or misclassification in regime selection should not prevent correct tax computation.
- It instructs the assessing officer to align the final tax liability with the regime used for calculation, avoiding the potential double burden.
- Overall, the decision preserves the integrity of the assessment without altering the underlying liability, by ensuring regime-consistent computation.
Tax experts say the decision highlights the importance of accurate regime selection and may guide similar cases where returns reflect one regime but computations are carried out under another.
