Rectification Application for Exempted Allowance Claim: ITAT upholds Claim Rejection u/s 143(1)(a) of Income Tax Act [Read Order]

The Mumbai bench of  Income Tax Appellate Tribunal (ITAT) has recently held that the assessee did not claim the amount of exempted allowance in return of income therefore the bench upheld the rejecting claim of rectification of order under Section 143(1)(a) of Income Tax Act, 1961.

Chandni Shah & Kinjal Patel   counsels appeared for the assessee and A.N. Bhalekar, counsel appeared for the revenue.

The aforesaid appeal was filed by the assessee Shilpa Prabhakar Kulkarni  against the order passed by the CIT(A) in relation to the rectification order passed by the Central Processing Centre (CPC) under Section 154 of the Income Tax Act.

The assessee Shilpa Prabhakar Kulkarni,  salaried individual filed return of income  on 01/08/2017 declaring total income of Rs.1,00,13,220/. Out of which salary income offered to tax was of rupees 99 lakhs.

The return of income filed by the assessee was processed by the CPC and total income was determined at Rs.1,35,41,560/ instead of Rs.1,00,13,220/ disclosed by the assessee.

Thereafter assessee filed rectification wherein the assessee requested that the assessee earned gross salary of Rs.1,35,19,992 and out of which claimed exemption of Rs. 35,26,484/- under Section 10 of the Income Tax Act.

Assesse submit that it was mistake apparent from the record and which was rectified by the CPC. However AO rejected the rectification order  and he rejected the claim of the exemption of the allowance of Rs. 35,26,484/-

Aggrieved, the order assesee filed an appeal before the CIT(A). The CIT(A) after verifying, rejected the contentions of the assessee and held that there is not any mistake found  from the record.

The CIT(A)  observed that the provisions of Section 154 of the Income Tax Act  are enacted for the purpose of any mistake apparent from record. This section is not meant for rectification of mistakes made by the appellant while filing return of income, the CIT(A) further noted.

It was also observed that the assessee did not revise its return of income and after processing of the return of income filed a rectification application wherein the assessee filed the details of the income from the salary in the schedule V.

Hence the assessee did not claim for exempted allowance in the return of the income. The omission on the part of the assessee and therefore, there was no mistake in the order passed under Section 143(1) Income Tax Act by the CPC.

After that the two member bench of the Om Prakash Kant (Accountant Member) and Kavitha Rajagopal (Judicial Member) upheld the finding of the  CIT(A), rejecting the claim of rectification of order under Section 143(1)(a) of the  Income Tax Act.

To Read the full text of the Order CLICK HERE

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