ITR filed under old tax regime by mistake, income tax paid under new regime: How a lady won case in ITAT Delhi

A recent case in the Income Tax Appellate Tribunal (ITAT), Delhi shows why picking the right and skilled chartered accountant matters for filing your income tax return (ITR). This case is about Mrs Sharma from Dilshad Garden, Delhi, India. She had filed her ITR under the old tax regime but paid taxes based on the new tax regime. This mismatch between her ITR and tax payment led to a tax demand notice.

Mrs Sharma was unaware of this serious error, since she had hired an accountant to file her ITR using the ITR-1 (Sahaj) form. She gave him all the documents and information. The accountant mistakenly filed her ITR under the old tax regime for AY2024-25 , even though the tax was calculated using the new tax regime.

Because of this, the Centralised Processing Centre (CPC) Bangalore calculated her tax based on the old tax regime. Since this amount was higher than the new tax regime amount, Mrs Sharma was issued a tax demand notice.


By the time Mrs Sharma found out about the accountant’s big mistake in filing her ITR , the due date for filing a revised and belated ITR had also expired. So Mrs Sharma filed a rectification request before CPC, Bangalore and requested them to please consider her ITR as if it was filed under the new tax regime. The CPC rejected her request. So, she filed an appeal before the National Faceless Assessment Centre (NFAC).

At NFAC, she explained that her tax was calculated only under the new tax regime in the ITR but the accountant had wrongly written in ITR-1 that she had opted for the old tax regime. NFAC rejected her case, so she appealed to ITAT Delhi.

Sadly, before ITAT Delhi could deliver the judgement, Mrs Sharma passed away for unknown reasons. Her husband, Mr Sharma, continued her battle with the help of Advocate Upender Kumar and won the case on September 15, 2026.

The ITAT Delhi quorum consisted of M. Balaganesh, Accountant Member and Sudhir Kumar, Judicial Member.

Chartered Accountant Ashish Niraj, Partner, A S N & Company, said to ET Wealth Online: “There is a famous saying 'to err is human,' i.e. making mistakes is a natural and unavoidable part of life. In the given case, the Honorable ITAT Delhi is very right in allowing Mrs Sharma’s appeal and directing the AO to compute the tax liability under the new tax regime as Mrs Sharma has proved that her ITR was calculated under the new tax regime only and tax was paid accordingly. ”

According to Niraj, “just a small mistake on part of the accountant regarding the regime should not make the taxpayer liable to pay additional tax and interest. Natural justice has been very well established by ITAT."

Also read: ITR was processed under the old tax regime due to tax consultant's mistake, taxpayer faced Rs 1.23 lakh demand: ITAT Bangalore allowed new tax regime

ITAT Delhi discussion

ITAT Delhi observed that Mrs Sharma had calculated her tax liability in the ITR under the new tax regime under Section 115BAC of the Income Tax Act, 1961 but wrongly stated in the ITR that she had not exercised the option of availing the new tax regime due to a mistake on part of her accountant while uploading the return.

ITAT Delhi said: “In our considered opinion, the assessee (Mrs Sharma) cannot be fastened with the tax liability for mere clerical error committed by her accountant.”

So, on this ground, ITAT Delhi ruled that in the interest of justice and fair play and considering the totality of facts and circumstances, the Income Tax Assessing Officer (AO) was directed to compute her tax liability under the new tax regime.

This is how she posthumously won the case on September 15, 2026, in ITAT Delhi.