You forgot to opt for s.115BAA in the original return and then filed Form 10-IC and a corrected return in answer to a s.139(9) notice. Does the option hold?
The Tribunal held that it does. Form 10-IC filed on 2 December 2024 and the corrected return filed on 6 December 2024 in answer to the defect notice sufficiently demonstrated the intention to opt for the concessional regime, and the procedural lapse in not exercising the option in the original return could not defeat the substantive claim where the statutory conditions were otherwise met.
Decided by the ITAT (Vikram Singh Yadav, Accountant Member and Anikesh Banerjee, Judicial Member) on 2026-03-16, reported as ITA No. 4828/Mum/2025, assessment year 2024-25. It bears on section 139(9), section 115BAA, section 139(1), section 143(1), section Rule 21AE of the Income Tax Act 1961, in Assessment & Scrutiny, How Tax Law Is Read and Appeals matters.
It answers a question the section does not: how much a corrected return filed under s.139(9) can carry. On this order it can carry an option that was omitted from the original return, provided the option is exercised before the corrected return goes in and the conditions are otherwise satisfied.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee, a company owning rental flats, filed its return for assessment year 2024-25 on 15 November 2024 without claiming the benefit of s.115BAA. The CPC issued a notice of defect under s.139(9) on 22 November 2024, the defect relating to discrepancies with Form 26AS and not to s.115BAA. The assessee filed Form 10-IC on 2 December 2024, expressing its intention to opt for the concessional regime, and then filed a corrected return on 6 December 2024 in answer to the defect notice.
The appeal was allowed. The order of the Commissioner (Appeals) was set aside with a direction to verify compliance with Form 10-IC and to grant the benefit of s.115BAA accordingly. The filing of Form 10-IC and the subsequent return rectifying the defect sufficiently demonstrated the assessee's intention to opt for the concessional tax regime, and the procedural lapse in not exercising the option in the original return could not defeat the substantive claim where the statutory conditions had otherwise been complied with.
The Tribunal recorded that the defect notice of 22 November 2024 was not as regards s.115BAA, so the assessee's response went beyond the defect notified. It treated the omission of the option from the original return as procedural rather than substantive, the substance being the exercise of the option before the corrected return was filed and compliance with the conditions of the regime. On that footing the claim could not be refused for the form in which it first reached the department.
The procedural lapse in not exercising the option in the original return cannot defeat the substantive claim of the assessee
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Handle my notice → Ask a CA on WhatsAppThe Tribunal held that it does. Form 10-IC filed on 2 December 2024 and the corrected return filed on 6 December 2024 in answer to the defect notice sufficiently demonstrated the intention to opt for the concessional regime, and the procedural lapse in not exercising the option in the original return could not defeat the substantive claim where the statutory conditions were otherwise met. This was decided by the ITAT (Vikram Singh Yadav, Accountant Member and Anikesh Banerjee, Judicial Member) and bears on section 139(9), section 115BAA, section 139(1), section 143(1), section Rule 21AE of the Income Tax Act 1961. It is reported as ITA No. 4828/Mum/2025, assessment year 2024-25. It answers a question the section does not: how much a corrected return filed under s.139(9) can carry. On this order it can carry an option that was omitted from the original return, provided the option is exercised before the corrected return goes in and the conditions are otherwise satisfied. If it applies to you, the first step is this: File the form exercising the option before you file the corrected return, and keep the two dates in that order; that sequence was what the Tribunal relied on.
The assessee, a company owning rental flats, filed its return for assessment year 2024-25 on 15 November 2024 without claiming the benefit of s.115BAA. The CPC issued a notice of defect under s.139(9) on 22 November 2024, the defect relating to discrepancies with Form 26AS and not to s.115BAA. The assessee filed Form 10-IC on 2 December 2024, expressing its intention to opt for the concessional regime, and then filed a corrected return on 6 December 2024 in answer to the defect notice. The matter was decided on 2026-03-16 by the ITAT (Vikram Singh Yadav, Accountant Member and Anikesh Banerjee, Judicial Member). On those facts the ITAT held as follows. The appeal was allowed. The order of the Commissioner (Appeals) was set aside with a direction to verify compliance with Form 10-IC and to grant the benefit of s.115BAA accordingly. The filing of Form 10-IC and the subsequent return rectifying the defect sufficiently demonstrated the assessee's intention to opt for the concessional tax regime, and the procedural lapse in not exercising the option in the original return could not defeat the substantive claim where the statutory conditions had otherwise been complied with.
The Tribunal recorded that the defect notice of 22 November 2024 was not as regards s.115BAA, so the assessee's response went beyond the defect notified. It treated the omission of the option from the original return as procedural rather than substantive, the substance being the exercise of the option before the corrected return was filed and compliance with the conditions of the regime. On that footing the claim could not be refused for the form in which it first reached the department. In the words reproduced by the source cited on this page: "The procedural lapse in not exercising the option in the original return cannot defeat the substantive claim of the assessee"
It was decided by the ITAT on 2026-03-16 and is reported as ITA No. 4828/Mum/2025, assessment year 2024-25. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 139(9), section 115BAA, section 139(1), section 143(1), section Rule 21AE, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was allowed. The order of the Commissioner (Appeals) was set aside with a direction to verify compliance with Form 10-IC and to grant the benefit of s.115BAA accordingly. The filing of Form 10-IC and the subsequent return rectifying the defect sufficiently demonstrated the assessee's intention to opt for the concessional tax regime, and the procedural lapse in not exercising the option in the original return could not defeat the substantive claim where the statutory conditions had otherwise been complied with. It arises in Assessment & Scrutiny, How Tax Law Is Read and Appeals matters, on section 139(9), section 115BAA, section 139(1), section 143(1), section Rule 21AE of the Income Tax Act 1961, and was decided by Vikram Singh Yadav, Accountant Member and Anikesh Banerjee, Judicial Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Do not assume the corrected return is confined to the defect notified; the notice here said nothing about s.115BAA. Put the acknowledgement of the form and of the corrected return on record at the first appellate stage. Expect the relief to be a direction to verify compliance with the form's conditions rather than an outright allowance.
Searched for later treatment; none was found. That is not the same as a source affirming it. This is a March 2026 order and nothing applying, doubting or dissenting from it has appeared on indiankanoon. The library holds Sarla Holdings Private Limited v. PCIT on the neighbouring question of the s.115BAA option, which is not cited in this order. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The paragraph number for the concluding holding is not established from the copy read, so the key_quote source is given by position rather than by paragraph. No reporter citation appears on the copy read. The order does not decide whether a corrected return under s.139(9) can carry a claim in every case; it decides that this option, exercised before the corrected return, could be given effect. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed. The order of the Commissioner (Appeals) was set aside with a direction to verify compliance with Form 10-IC and to grant the benefit of s.115BAA accordingly. The filing of Form 10-IC and the subsequent return rectifying the defect sufficiently demonstrated the assessee's intention to opt for the concessional tax regime, and the procedural lapse in not exercising the option in the original return could not defeat the substantive claim where the statutory conditions had otherwise been complied with.
TaxSphere, “Electronfab Engineering Pvt Ltd v ITO”, https://taxnotice.vittsphere.com/caselaw/case/electronfab-engineering-v-ito-139-9-corrected-return-115baa/ (validity last checked 2026-09-17)
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