CPC disallowed my client's s.89 relief on arrears of salary because Form 10E had not been filed when the return was processed. He filed it later. Is the relief gone?
No. Filing Form No. 10E is a procedural requirement, and the Tribunal directed the Assessing Officer to accept a Form 10E filed after the s.143(1) intimation and to grant the relief after verification. The Indore Bench reasoning it follows is that where a prescribed form goes to a relief or exemption, courts hold the requirement procedural and allow the substantive benefit even on a belated form, absent mala fides.
Decided by the ITAT (Dr. Manish Borad, Accountant Member (ITAT, 'SMC' Bench, Pune)) on 2025-07-16, reported as ITA No.1379/PUN/2025, assessment year 2022-23. It bears on section 89, section 143(1) of the Income Tax Act 1961, in Salary & Perquisites, Assessment & Scrutiny and Appeals matters.
This is the most common single reason s.89 relief is lost, and it is lost silently: the return claims relief, Form 10E is not on the portal, CPC drops the relief in the s.143(1)(a) adjustment, and the assessee sees only a demand. The remedy is not a fresh return but an appeal, with the form filed in the meantime. Two things to hold on to. First, the requirement itself is procedural, not a condition of entitlement — s.89 and rule 21AA do not say relief is forfeited for delay, and rule 21AA speaks of furnishing the particulars to the employer. Second, the relief on these orders is a remand for verification, not an outright allowance, so the computation still has to hold up. There is one place where a late form will not save the claim: s.89 relief and the s.10(10C) exemption are alternatives. The proviso to s.89 denies relief on an amount received on voluntary retirement, termination or voluntary separation where exemption under s.10(10C) has been claimed for it in that or any other assessment year, and the third proviso to s.10(10C) forfeits the exemption where relief under s.89 has been allowed. Finance (No. 2) Act 2009 made them mutually exclusive from assessment year 2010-11. Advice to claim both is wrong for every year from AY 2010-11 onwards, whatever earlier decisions on pre-2010 years say.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
For assessment year 2022-23 the assessee filed her original return on 31 July 2022 declaring total income of Rs 12,47,230 and claiming a refund of Rs 4,820. She filed a revised return on 31 December 2022 claiming a refund of Rs 42,920, in which she claimed relief under s.89 of Rs 66,173 on arrears of salary. Form No. 10E, required under rule 21AA, was filed on 14 March 2023. CPC had already passed the order under s.143(1)(a) on 7 February 2023, before the form was filed, and denied the relief. The CIT(A), NFAC upheld the denial by order dated 26 March 2025. Before the Tribunal the assessee's grounds were that s.89 does not provide for disallowance of relief for delay in filing Form 10E, that rule 21AA neither provides for such disallowance nor uses mandatory language — it says 'may furnish' — that the delay of about eight months was neither wilful nor deliberate and caused the Revenue no prejudice, and that the delay ought to have been condoned. The only prayer pressed was that the Jurisdictional Assessing Officer be directed to accept Form No. 10E and grant the relief. Reliance was placed on the Indore Bench order in Yashwant Singh Pawar v. ITO, Dhar, ITA No.268/Ind/2023 dated 21 December 2023.
The appeal was allowed for statistical purposes. Form No. 10E filed by the assessee should be accepted and relief under s.89 granted after verification of the details in it. The issue was remitted to the Jurisdictional Assessing Officer to carry out the necessary verification after duly considering the Form 10E e-filed on 14 March 2023, with a proper opportunity of hearing to the assessee.
The Member found the facts squarely within the Indore Bench order relied on, and reproduced its operative paragraph. In that case the assessee had not filed Form No. 10E before filing the return but had filed it immediately after receiving the s.143(1) intimation and before filing the first appeal. The Indore Bench recorded that where the question whether the filing of a prescribed form is a procedural requirement or mandatory has come before the courts, particularly in matters of exemption and relief, the courts have been liberal and judicious in holding the requirement procedural and in directing the Revenue to allow the substantive benefit even where the form was filed belatedly. It noted that the assessee there was a senior citizen and a retired government employee, so there was no mala fide intention or attempted negligence in not filing the form in time, and remanded the matter to the Assessing Officer to verify the form and allow the eligible relief. Holding that finding squarely applicable, the Pune Bench made the same order on the same footing. The assessee was also directed to remain vigilant and not to seek unnecessary adjournments.
We are consciously aware that in many situations, particularly in the matters of exemption, relief, etc., whenever this issue has cropped before the courts that the filing of any prescribed form is a procedural requirement or mandatory, the courts are liberal and judicious in holding requirement as procedural and thereby directing the revenue to allow substantive benefit to assessee even if the form is filed belatedly.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppNo. Filing Form No. 10E is a procedural requirement, and the Tribunal directed the Assessing Officer to accept a Form 10E filed after the s.143(1) intimation and to grant the relief after verification. The Indore Bench reasoning it follows is that where a prescribed form goes to a relief or exemption, courts hold the requirement procedural and allow the substantive benefit even on a belated form, absent mala fides. This was decided by the ITAT (Dr. Manish Borad, Accountant Member (ITAT, 'SMC' Bench, Pune)) and bears on section 89, section 143(1) of the Income Tax Act 1961. It is reported as ITA No.1379/PUN/2025, assessment year 2022-23. This is the most common single reason s.89 relief is lost, and it is lost silently: the return claims relief, Form 10E is not on the portal, CPC drops the relief in the s.143(1)(a) adjustment, and the assessee sees only a demand. The remedy is not a fresh return but an appeal, with the form filed in the meantime. Two things to hold on to. First, the requirement itself is procedural, not a condition of entitlement — s.89 and rule 21AA do not say relief is forfeited for delay, and rule 21AA speaks of furnishing the particulars to the employer. Second, the relief on these orders is a remand for verification, not an outright allowance, so the computation still has to hold up. There is one place where a late form will not save the claim: s.89 relief and the s.10(10C) exemption are alternatives. The proviso to s.89 denies relief on an amount received on voluntary retirement, termination or voluntary separation where exemption under s.10(10C) has been claimed for it in that or any other assessment year, and the third proviso to s.10(10C) forfeits the exemption where relief under s.89 has been allowed. Finance (No. 2) Act 2009 made them mutually exclusive from assessment year 2010-11. Advice to claim both is wrong for every year from AY 2010-11 onwards, whatever earlier decisions on pre-2010 years say. If it applies to you, the first step is this: File Form No. 10E on the portal at once, even after the intimation — both these orders turn on the form being on record by the time the appellate authority looks at it.
For assessment year 2022-23 the assessee filed her original return on 31 July 2022 declaring total income of Rs 12,47,230 and claiming a refund of Rs 4,820. She filed a revised return on 31 December 2022 claiming a refund of Rs 42,920, in which she claimed relief under s.89 of Rs 66,173 on arrears of salary. Form No. 10E, required under rule 21AA, was filed on 14 March 2023. CPC had already passed the order under s.143(1)(a) on 7 February 2023, before the form was filed, and denied the relief. The CIT(A), NFAC upheld the denial by order dated 26 March 2025. Before the Tribunal the assessee's grounds were that s.89 does not provide for disallowance of relief for delay in filing Form 10E, that rule 21AA neither provides for such disallowance nor uses mandatory language — it says 'may furnish' — that the delay of about eight months was neither wilful nor deliberate and caused the Revenue no prejudice, and that the delay ought to have been condoned. The only prayer pressed was that the Jurisdictional Assessing Officer be directed to accept Form No. 10E and grant the relief. Reliance was placed on the Indore Bench order in Yashwant Singh Pawar v. ITO, Dhar, ITA No.268/Ind/2023 dated 21 December 2023. The matter was decided on 2025-07-16 by the ITAT (Dr. Manish Borad, Accountant Member (ITAT, 'SMC' Bench, Pune)). On those facts the ITAT held as follows. The appeal was allowed for statistical purposes. Form No. 10E filed by the assessee should be accepted and relief under s.89 granted after verification of the details in it. The issue was remitted to the Jurisdictional Assessing Officer to carry out the necessary verification after duly considering the Form 10E e-filed on 14 March 2023, with a proper opportunity of hearing to the assessee.
The Member found the facts squarely within the Indore Bench order relied on, and reproduced its operative paragraph. In that case the assessee had not filed Form No. 10E before filing the return but had filed it immediately after receiving the s.143(1) intimation and before filing the first appeal. The Indore Bench recorded that where the question whether the filing of a prescribed form is a procedural requirement or mandatory has come before the courts, particularly in matters of exemption and relief, the courts have been liberal and judicious in holding the requirement procedural and in directing the Revenue to allow the substantive benefit even where the form was filed belatedly. It noted that the assessee there was a senior citizen and a retired government employee, so there was no mala fide intention or attempted negligence in not filing the form in time, and remanded the matter to the Assessing Officer to verify the form and allow the eligible relief. Holding that finding squarely applicable, the Pune Bench made the same order on the same footing. The assessee was also directed to remain vigilant and not to seek unnecessary adjournments. In the words reproduced by the source cited on this page: "We are consciously aware that in many situations, particularly in the matters of exemption, relief, etc., whenever this issue has cropped before the courts that the filing of any prescribed form is a procedural requirement or mandatory, the courts are liberal and judicious in holding requirement as procedural and thereby directing the revenue to allow substantive benefit to assessee even if the form is filed belatedly." The decision followed or applied Yashwant Singh Pawar v. ITO, Dhar, ITA No.268/Ind/2023 (ITAT Indore), order dated 21 December 2023 — followed and quoted.
It was decided by the ITAT on 2025-07-16 and is reported as ITA No.1379/PUN/2025, assessment year 2022-23. 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 89, section 143(1), 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 for statistical purposes. Form No. 10E filed by the assessee should be accepted and relief under s.89 granted after verification of the details in it. The issue was remitted to the Jurisdictional Assessing Officer to carry out the necessary verification after duly considering the Form 10E e-filed on 14 March 2023, with a proper opportunity of hearing to the assessee. It arises in Salary & Perquisites, Assessment & Scrutiny and Appeals matters, on section 89, section 143(1) of the Income Tax Act 1961, and was decided by Dr. Manish Borad, Accountant Member (ITAT, 'SMC' Bench, Pune). 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. Appeal the s.143(1) intimation rather than filing a rectification and stopping there; in the companion Chennai case the CIT(A) had confirmed the intimation precisely because the form was uploaded after the processing date. Plead the absence of mala fides and of deliberate delay expressly — that is the finding the Indore Bench rested on, and both following orders repeat it. Ask in terms for a remand to the Assessing Officer to verify Form 10E and allow the eligible relief; that is the order actually made, and asking for outright allowance invites a refusal. Before claiming s.89 relief on a VRS or termination payment, check whether s.10(10C) exemption has been claimed on the same amount in this or any other year — for AY 2010-11 onwards you may have one or the other, never both, and claiming both forfeits the exemption.
Validity check could not be completed. Validity check could not be completed; no search for later treatment was carried out and whether the Revenue has appealed is not known. The same line was independently applied by the Chennai Bench on 27 September 2024 in Palanisamy Deivanayaghi v. ACIT, ITA No.2026/Chny/2024 — an LIC employee whose Form 10E was uploaded on 1 June 2024, after processing — which was read in full for this entry and which remanded on the same terms. Both orders are Tribunal orders following a third Tribunal order; no High Court authority either way was located, and this note should not be read as a statement that the point is settled. 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 indiankanoon search listing dates this order 9 July 2025; the order itself records 9 July 2025 as the date of hearing and 16 July 2025 as the date of pronouncement, and the latter is taken. The order was fetched twice; the two renderings of the block-quoted Indore paragraph differ in one obvious scanning artefact ('filing' in one, 'fling' in the other) and both carry 'Govt,' with a comma, so the quote reproduced here is taken from a span that is identical in both. The renderings also print 'Court Bench, Indore' where the sense plainly requires 'Coordinate Bench, Indore'. The underlying Indore order, Yashwant Singh Pawar v. ITO, Dhar, ITA No.268/Ind/2023 dated 21 December 2023, could not be located as a document on indiankanoon and was read only as reproduced in this order and as described in the Chennai order. 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 for statistical purposes. Form No. 10E filed by the assessee should be accepted and relief under s.89 granted after verification of the details in it. The issue was remitted to the Jurisdictional Assessing Officer to carry out the necessary verification after duly considering the Form 10E e-filed on 14 March 2023, with a proper opportunity of hearing to the assessee.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
My return was only processed under 143(1). Does that stop the department reopening it later?
My refund is being held back because scrutiny is pending. Can the officer simply sit on it?
I let the 30 days to appeal my 143(1) intimation lapse. Can I still go to the PCIT under s.264?
I over-reported income by mistake and the time to file a revised return has gone. Can it be fixed?