This is a recent ITAT Bangalore ruling from August 2026 that is directly relevant for anyone who has ever had a form filed incorrectly during ITR season.

Background

Adit Nilesh Shah, a lawyer from Bengaluru, filed his return for AY 2025-26 declaring income of Rs. 32.55 lakh under the New Tax Regime.

Before filing his return, his consultant had filed Form 10-IEA on 30 September 2025, which is the form used to opt out of the New Tax Regime.

The consultant filed it inadvertently during routine compliance work. It was not the assessee's intention.

The return was filed on 24 October 2025, clearly computing tax under the New Tax Regime. No old-regime deductions were claimed.

What the Tax Department said

The CPC processed the return based on Form 10-IEA, not the return itself.

Since the Form indicated opting out of the New Tax Regime, the return was processed under the Old Tax Regime.

A demand of Rs. 1,23,770 was raised.

The CIT(A) upheld this view. He noted that Form 10-IEA was digitally verified and signed, and therefore could not be treated as non-existent just because the assessee later claimed it was a mistake.

What the taxpayer argued

The return of income is the primary statutory document reflecting the assessee's actual choice.

Form 10-IEA was filed inadvertently by the consultant and did not represent the assessee's real intention.

The return filed subsequently made the actual choice clear. No old-regime deductions were claimed at any point.

The assessee relied on an earlier Pune ITAT ruling (Akshay Nitin Malu vs ITO) where the Tribunal had held that the option reflected in the subsequently filed return should prevail over an earlier form.

What the court decided

ITAT Bangalore agreed with the assessee.

The return of income is the document through which a taxpayer declares income and computes tax. When a return clearly reflects the intended regime, it cannot be ignored simply because an inconsistent form was filed earlier.

The Tribunal noted that the assessee had not claimed any deductions exclusive to the Old Tax Regime. There was no question of double benefit.

Digital verification of a form establishes its filing and authentication. But it does not override the explanation of an inadvertent error when the subsequent return clearly reflects a different choice.

The Pune ITAT ruling in Akshay Nitin Malu was applied here. In that case the direction was opposite (New to Old), but the principle was the same: the return filed later prevails.

The demand of Rs. 1,23,770 was deleted. The AO was directed to process the return under the New Tax Regime.

Key takeaway

If a form was filed incorrectly before your ITR, and your actual return clearly reflects the correct regime with no contradictory deductions claimed, the return can prevail over the earlier form.

Digital signing of a form does not automatically make it final if the subsequent return tells a different story and the mistake is explained properly.

The regime chosen in the return matters more than a form filed in error, at least as per this line of ITAT decisions.

If you are in a similar situation, document the error clearly, ensure your return reflects the correct regime, and do not claim any deductions that belong to the other regime.