Income wrongly declared in ITR by mistake cannot be taxed because assessee did not earned it-ITAT

Income wrongly declared in ITR by mistake cannot be taxed because assessee has not earned it. There is no provision in the Act to do so.

ABCAUS Case Law Citation:
ABCAUS 3052 (2019) (07) ITAT

The instant appeal was filed by the assessee against the order of the CIT(A) passed u/s 154 & u/s 250(6) of the Income Tax Act, 1961 (the Act) by upholding the order of the Assessing Officer (AO) who had failed to rectify the inadvertent mistake committed by the assessee in the return of income filed electronically.

The assessee had disclosed income under the head ‘any other income’ by mistake in Schedule-BP, whereas the same amount was already disclosed as profit before taxes in Part A-P&L. Thereafter, the return was processed by the Centralized Processing Centre, Bangalore U/s. 143(1) of the Act wherein the returned “business income” and “any other income” was treated as the total Income after deductions against which demand of tax was computed.

The assessee pointed out to the AO, the duplicity of the income disclosed in the e-return by filing a rectification return and thereafter by filing a rectification petition u/s 154 of the Act seeking rectification of the mistake.

However, the AO had rejected the rectification petition filed by the assessee by stating that, the e-filed return of income was processed by CPC Bangalore arriving at the total income as declared by the assessee.

The CIT (A) had also dismissed the appeal of the assessee on technical grounds.

Before the Tribunal, the assessee further argued that making addition in the hands of the assessee due to the inadvertent mistake committed by the assessee in the e-return of income was not justifiable and the same may be deleted.

The Tribunal observed that certain mistake had crept into the order processed by the CPC u/s 143(1) of the Act due to the inadvertent mistake committed by the assessee in the ereturn filed.

The Tribunal opined that in such situation it is the primary duty of the AO having jurisdiction to take appropriate steps in order to rectify the mistake and grant relief to the assessee. The assessee cannot be taxed on an income wrongly declared in the return of income by mistake because the assessee has not earned such income.

The Tribunal stated that just because certain genuine mistakes were committed while filing the e-return of income does not provide sanction to the Revenue to tax such income wrongly included. There is no provision in the Act to do so.

Accordingly, the Tribunal remitted the matter back to the file of the AO with directions to verify the claim of the assessee and if it is found that the assessee had by mistake shown certain figures as income in the ereturn of income twice then the AO shall rectify such mistake and the correct income shall be arrived at and taxed.

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