Typographical error in turnover accepted during assessment not a mistake apparent from record

Typographical error in turnover declared in ITR was not as a mistake apparent from the record u/s 154 when AO during assessment accepted the same after enquiry- ITAT

In a recent judgment ITAT has held that where difference in sales declared in ITR and VAT return arose only on account of a typographical error and the AO during assessment accepted the turnover after due enquiry, it can not be said to be on account of any omission on the part of assessee, nor could not have been held to be as a mistake apparent from the record u/s 154.

ABCAUS Case Law Citation:
5238 (2026) (10) abacus.in ITAT

The appellant assessee filed his return for the assessment year under section 44AD disclosing on gross sales of approx. Rs. 9 lakhs. However, while filing the return of income, the return preparer committed a clerical mistake and wrongly typed the sale figure by adding one extra digit in the turnover figure making it say Rs. 90 lakhs.

During the course of assessment proceedings, the assessee had filed a copy of his trading, profit and loss account and balance-sheet on the basis of records of purchases, sales and other relevant records maintained in the course of course of regular business. While filing the financial statements of accounts during the course of assessment proceedings, it came to notice that the aforesaid error had been committed in typing of the sale figure while filing the ITR and the assessee himself brought the mistake to the notice of the Assessing Officer. The Assessing Officer, after considering the explanation furnished by the assessee and after verifying the VAT return came to the conclusion that the aforesaid mistake in the filing of the sales figures was just a clerical mistake and he accepted the actual sales and framed the assessment order under section 143(3), by accepting the returned income of the assessee.

Later on, on the basis of an audit objection, the Assessing Officer issued a notice under section 154 proposing to make addition of the difference in the turnover on account of the difference in the sale as per ITR 4 and sales declared in the financial statements.

During the course of rectification proceedings, the assessee had objected to the same on merits pointing out that the difference in sale was only on account of typographical mistakes and that proceedings under section 154 could not be invoked on the basis of change of opinion. However, the Assessing Officer did not note that the sale was verifiable from the return filed under U.P. VAT Act filed on monthly / quarterly basis and the financial statement filed during the course of original assessment proceedings. He accordingly made the addition.

The CIT(A) ignored the facts and proceeded to dismiss the appeal of the assessee in limine holding that the same had not been explained.

The Tribunal observed that apparently the issue was whether the difference in the sale amount entered in the ITR and the financial statements submitted at the time of assessment were examined by the Assessing Officer at the time of assessment with reference to the VAT returns filed by the assessee and the Assessing Officer had satisfied himself that the difference had arisen only on account of a typographical error and not on account of any omission on the part of assessee.

The Tribunal observed that in the facts of the case, the mistake could not have been held to be as a mistake apparent from the record without pointing out the facts of what the mistake was. To disregard the view formed by the Assessing Officer after enquiry, only because the audit had observed a contradiction in the figures as recorded in the income tax return and the financial statements, amounts to a forming an opinion on the basis of speculation and borrowed satisfaction, without pointing out any mistake apparent from the record.

The Tribunal opined that in the absence of any material being brought on record to demonstrate that the Assessing Officer committed a mistake in assessing the sales after comparing the same with the VAT returns filed by the assessee, it cannot be held that there was any mistake apparent from the record in the assessment order passed by the Assessing Officer, after due enquiry.

Therefore, the Tribunal held that the action of the Assessing Officer in passing a rectification order under section 154, being based on borrowed satisfaction and without any finding of mistake in the enquiries conducted during assessment proceedings, was not maintainable and consequently, the same was quashed.

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