Here's a situation that should worry every taxpayer who's ever said "mera CA sab dekh lega" and moved on. A taxpayer in Bengaluru trusted his consultant to handle the paperwork around his tax regime choice. The consultant filed Form 10-IEA the form that formally records whether a taxpayer with business or professional income is opting out of (or back into) the new tax regime but got it wrong. The Centralised Processing Centre (CPC) recomputed the return under the new tax regime, stripped out the deductions the taxpayer had claimed on the old-regime assumption, and sent him a demand notice for ₹1.23 lakh.

The taxpayer hadn't done anything wrong himself. He'd handed the job to a professional, signed what he was asked to sign, and assumed it was sorted. It wasn't and the mismatch only surfaced once the intimation landed in his inbox with a tax bill attached.

Why Form 10-IEA Trips People Up

Since AY 2024-25, the new tax regime under Section 115BAC is the default for everyone. If you have income from business or profession and want to stick with (or return to) the old regime, filing Form 10-IEA on or before the due date under Section 139(1) isn't optional  it's the only way to make that election valid. Miss it, file it late, or get the details wrong, and the system does exactly what it's built to do: it processes your return under the new regime, whether or not that's what you actually wanted.

This is exactly the trap the Bengaluru taxpayer fell into. The paperwork error was procedural and entirely on the consultant's side, but the tax department's systems don't ask who's at fault they just process what's on file.

What the Tribunal Looked At

On appeal, the matter reached the Income Tax Appellate Tribunal's Bengaluru bench. The core question wasn't really about Form 10-IEA in isolation it was whether a genuine procedural slip, made by a consultant and not the taxpayer, should be allowed to override the taxpayer's actual, demonstrable intent regarding which regime he wanted to be taxed under.

This lines up with a pattern that's been building across ITAT benches over the past couple of years. In more than one ruling on the earlier Form 10-IE (10-IEA's predecessor), tribunals have drawn a distinction between conditions that are mandatory the kind that, if unmet, genuinely invalidate a regime option and requirements that are more directory in nature, meaning a delay or filing slip doesn't automatically wipe out the underlying claim if the taxpayer's intent and eligibility are otherwise clear on record. Tribunals have leaned toward the latter view when the return itself, and the taxpayer's conduct, made the intended regime obvious.

Applying that reasoning, the Bengaluru bench directed a recomputation that gave weight to what the taxpayer had actually intended and disclosed, rather than treating the consultant's filing error as the final word. The ₹1.23 lakh demand, raised purely on the back of the regime mismatch, didn't survive that recomputation.

The Bigger Lesson Here

This case is a reminder of something a lot of taxpayers don't think about until it's too late: appointing a consultant doesn't transfer the consequences of a mistake it only transfers the labour. The liability, the notice, and the stress of fixing it still land on the taxpayer first.

• Always ask for the acknowledgment. Every Form 10-IEA filing generates an acknowledgment number. If your consultant can't show it to you, that's a red flag.
• Cross-check the regime on your ITR-V and intimation. Don't assume; open the Section 143(1) intimation and see which regime the computation actually reflects.
• Act fast on a mismatch. Rectification requests, revised returns, and grievances all have windows. The earlier you catch a wrong-regime demand, the more remedies stay open to you.
• Escalate in writing. If it's a consultant error, get it documented it matters if the issue ever needs to go before an appellate authority.

Note: Specific case citation details (party name, ITA number, bench composition, date of order) haven't been independently verified for this piece and have been kept general on purpose. If you have the order copy or a source link, we can update this with precise references.