Mere technical mistake in return cannot be a ground of disallowing a claim

Mere technical mistake made by assessee while filing up return cannot be a ground of disallowing the claim when such mistake is curable – ITAT

In a recent judgment, ITAT has directed CPC to allow deduction for amount paid as gratuity to LIC trust holding that mere technical mistake while filing up return cannot be a ground of disallowance.

ABCAUS Case Law Citation:
ABCAUS 3999 (2024) (05) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the order passed by the AO, CPC, Bengaluru in intimation under Section 143(1) of the Income Tax Act, 1961 (the Act).

The assessee had challenged the addition of Rs.6,00,000/- made by the AO CPC, Bengaluru in the intimation under Section 143 (3) for A.Y.2020-21. The said amount was paid as gratuity to LIC trust. Such disallowance was made on account of provision of gratuity.

However, such disallowance was made due to the reason the appellant by mistake claimed the deduction of Rs.6,00,000/- under Section 43B on account of leave encashment which was disallowed in any preceding previous year but allowable during the previous year.

In the return of income, at Serial number 10(f) the appellant had claimed an amount of any sum payable at Rs. 6,00,000/-. whereas in the tax audit report under 3CD at serial number 26 the amount of leave encashment which pre-existed on the first day of the previous year but was not allowed in the assessment of any previous year and was paid during the previous year was mentioned as Nil.

As a fact, instead of mentioning of Rs.6,00,000/- in column 10(b) specifying sum payable by way of contribution to any provident fund/ superannuation / gratuity fund any other fund for welfare of the employees, the same was mentioned in column 10(f) where the details in respect of sum payable towards leave encashment is supposed to be filed in. As this mistake has been done inadvertently by the assessee, the CPC has denied the claim of the assessee which was further confirmed by the First Appellate Authority.

Before the Tribunal, the assessee stated that such mistake was inadvertently made by the assessee be ignored and the CPC be given a direction to consider the same to pass order in accordance with law.

The Tribunal opined that the mistake inadvertently done by the assessee needed to be considered. Merely technical mistake made by the assessee while filing up by the form cannot be a ground of disallowing the claim of the assessee when such mistake is curable in nature.

Accordingly, the Tribunal set aside the issue to the file of the AO, CPC to reconsider the issue afresh upon considering the error inadvertently done by the assessee and to further consider the payment made to the tune of Rs. 6,00,000/- being gratuity paid to LIC trust at column 10 (b) and to pass orders in accordance with law.

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