The Income Tax Appellate Tribunal (ITAT) Chennai bench directed the Assessing Officer (AO) to recompute the income of the assessee observing the inadvertent error in the income tax returns filed.
The assessee, Vivekananda Seva Trust is a trust filed the appeal against order of Commissioner of Income Tax (Appeals)[CIT(A)] by challenging the denial of deduction under Section 11 of Income Tax Act, 1961 as applicable to a registered charitable trust.
The Assessee filed ITR-7 but it could be seen that the assessee has inadvertently filled up a column of Schedule-BP which is applicable only if the assessee carries on any business. The CPC has processed the return of income and taken gross receipts as the business income.
The CIT(A) upheld the same on the ground that the assessee did not furnish return under Section 139(5) Income Tax Act correcting the wrong entries in the original return of income.
Further the assessee has filed a rectification application which got rejected. Aggrieved by the order, the assessee filed an appeal before the tribunal.
During the proceedings , N.V.Narayanan , the counsel for the assessee submitted that deduction has been denied only because of inadvertent error in filling up certain columns in Income Tax Return forms.
D.Hema Bhupa, the Counsel for Revenue submitted that the time limit to file revised return of income was already over and therefore, the assessee should seek condonation of delay from appropriate authority.
It was observed by the tribunal that deduction under Section 11 Income Tax Act has been denied only due to the fact that there was inadvertent error while filling up the schedules in Income Tax Return forms.
Thus, the error has occurred only due to wrong filling of columns / schedules in Income Tax Return forms. The ignorance / mistake of the assessee could not jeopardize a valid claim of the assessee.
After reviewing the facts and submissions of the both parties, the two member bench of Mahavir Singh (President) and Manoj Kumar Aggarwal (Judicial Member) held that The object of the assessment is to determine correct income of the assessee and revenue could not gain out of errors committed by the assessee and directed the AO to recompute the income of assessee .
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