The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) has set aside the revision order as inadvertent mistake was due to the typographical error in calculating the total income.
The issue raised by the PCIT in the revisionary proceedings pertains to understatement of short-term capital gain (STCG). In this respect, assessee, Bijni Dooars Tea Company Ltd had submitted before the PCIT that it had wrongly adjusted the Long-Term Capital Loss incurred during the year twice, once with Long Term Capital Gain and again with Short Term Capital Gain out of inadvertent mistake in its computation of income as per the normal provisions of the Act. However, the total amount of gain on sale of investments was correctly reflected in the audited balance sheet. There was no mala fide intention of the assessee and it was a case of inadvertent mistake.
It was further submitted that there will be no additional tax liability due to the said error as mentioned above since the assessee was liable to pay tax as per Section 115JB of the Income Tax Act and the assessee had surplus tax credit under Section 115JAA of the Income Tax Act For tax paid in earlier years. Original as well as revised/correct computation of income and calculation of tax thereon were referred, placed on record from where it was pointed that total tax payable for the AY 2018-19 remained the same.
It was asserted that since it had already paid the requisite tax on the Total Income and there arises no additional tax liability due to the said clerical mistake, the assessment order was not erroneous in so far as prejudicial to the interest of the revenue. According to the assessee, only the amount of carried forward credit under Section 115JAA of the Income Tax Act needed to be reduced which will be done in its return of income for A Y 2023-24.
S. K. Tulsiyan, appeared on behalf of the assessee and S. Datta,appeared on behalf of the revenue.
The two-member Bench of Rajpal Yadav, (Vice President) and Girish Agrawal, (Accountant Member) set aside the revision order observing that,
“We find that on this issue, present case is purely on facts which are verifiable from the records of the assessee, examination and verification of the original computation of income and tax vis-à-vis the revised computation of income and tax placed on record. We find that it is case of bonafide mistake committed by the assessee, which effectively does not result into prejudice caused to the revenue in the year under consideration. Liability of tax for the year under consideration is duly discharged by the assessee which has been evidently demonstrated from the two computations placed on record.”
The Bench further held that every loss of revenue as a consequence of an order of Assessing Officer could not be treated as prejudicial to the interest of the revenue. When the Assessing Officer adopted one of the courses permissible in law and it had resulted in loss to the revenue, or where two views are possible and the Assessing Officer had taken one view with which the CIT would not agree, it could not be treated as an erroneous order prejudicial to the interest of the revenue unless the view taken by the Assessing Officer was unsustainable in law.
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