ITR filed under new regime, consultant’s mistake led to old regime & Rs 1.23L demand
A Bengaluru resident, Mr. Shah, faced a tax demand of Rs 1.23 lakh after his consultant mistakenly filed a form opting him out of the new income tax regime. The ITAT Bangalore ruled in favor of the taxpayer, acknowledging the error and allowing him to maintain his original choice of the new regime.
Why it matters
The case illustrates the risks of tax filing errors and the importance of legal recourse when administrative mistakes lead to significant financial penalties.
Filing your own income tax return can be a daunting and tedious process for many. That’s when you hire a consultant. But, what if the consultant mixes up your ITR between the new and old income tax regime? You may get a tax notice, and that’s exactly what happened with Mr Shah from Bengaluru.A resident of Ali Asker Road, Bengaluru, Mr Shah filed his income tax return (ITR) under the new tax regime and reported a total income of Rs 32.55 lakh. However, on September 30, 2025, his tax consultant inadvertently filed Form No. 10-IEA, effectively exercising the option to move him out of the new income tax regime!This created a problem for Shah because his ITR had been prepared on the basis of the new income tax regime.
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