The Chennai bench of the Income Tax Appellate Tribunal (ITAT) ordered reassessment in this case where the assessee inadvertently filed the return in the wrong form.
The brief facts of the case are that the assessee Young Men’s Welfare Society is an Association of Persons (AOP) who inadvertently filed the return in ITR Form 7 instead of ITR Form No.5. The said return was processed by the Central Processing Centre and thereby the assessee was taxed at maximum marginal rates without giving deduction of expenses.
Aggrieved assessee filed a rectification application under Section 154 of the Income Tax Act, however, the same was rejected in a mechanical manner by the Assessing Officer. The appeals filed by the assessee were also dismissed by the CIT(A) holding the same as barred by limitation.
Counsel for the assessee submitted that the appeal filed by the assessee before the CIT(A) is required to be treated within the limitation period as the same was covered by the decision of the Supreme Court in Suomoto Writ Petition (C) No. 3 of 2020 dated 10.01.2022. Counsel for the assessee further submitted that the assessee has filed a rectification application which has been dismissed by the Assessing Officer in a mechanical manner.
The assessee inadvertently filed the return in ITR 7, however, when the defect was pointed out, the assessee rectified the defect and filed return in ITR 5. It has been held time and again that the Income Tax Authorities are not supposed to punish assessees for their bona fide mistake.
The Bench consisting of Judicial Member, Sanjay Garg and Account Member, Dr. Manish Borad set aside the impugned orders of the lower authorities and restore the matter to the file of Assessing Officer with a direction to examine the contentions raised by the assessee and tax the assessee at the rates as applicable to the assessee considering the revised return filed by the assessee.
Both the appeals filed by the assessee against the separate orders dated 19.09.2022 of the National Faceless Appeal got allowed and opened for re-assessment, as a result.
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