Disallowance of Exempt Allowances Due to Form 16 and Form 26AS Mismatch: ITAT Remits Matter to AO for Verification [Read Order]
The ITAT noted that the mismatch arose from incorrect data entry and TDS filing mistakes by the employer
![Disallowance of Exempt Allowances Due to Form 16 and Form 26AS Mismatch: ITAT Remits Matter to AO for Verification [Read Order]](https://images.taxscan.in/h-upload/2025/06/06/2041495-disallowance1.webp "Disallowance of Exempt Allowances Due to Form 16 and Form 26AS Mismatch: ITAT Remits Matter to AO for Verification [Read Order]")
The Mumbai Bench of Income Tax Appellate Tribunal( ITAT)remitted the matter back to the Jurisdictional Assessing Officer (JAO) for verification in a case involving disallowance of exempt allowances due to a mismatch between Form 16 and Form 26AS. Deepak Kumar Chaturvedi,appellant-assessee, was a salaried employee of Ultratech Cement Limited. He filed his return...
The Mumbai Bench of Income Tax Appellate Tribunal( ITAT)remitted the matter back to the Jurisdictional Assessing Officer (JAO) for verification in a case involving disallowance of exempt allowances due to a mismatch between Form 16 and Form 26AS.
Deepak Kumar Chaturvedi,appellant-assessee, was a salaried employee of Ultratech Cement Limited. He filed his return on 03.10.2017, reporting total income of Rs. 18,65,450/-, which included salary income of Rs. 20,04,728/-. He showed gross salary including perquisites of Rs. 22,90,157/- and claimed deductions of Rs. 2,82,929/- under section 10 for allowances and Rs. 2,500/- for professional tax, resulting in net taxable salary of Rs. 20,04,728/-.
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During processing, the Centralized Processing Center (CPC) ignored the section 10 allowance and computed taxable salary at Rs. 22,97,250/-, raising a demand. The assessee argued that the employer’s Form 16 supported the claimed exemptions and taxable salary of Rs. 20,04,728/-. The employer had allowed Rs. 1,200 for child education and Rs. 2,81,729 for house rent exemption under section 10.
The Commissioner of Income Tax(Appeals)[CIT(A)] noted that the return contained errors in filling data in correct columns, which caused the CPC to disallow the exemptions and raise the demand.
The assessee counsel submitted that all necessary documents, including the income computation, Form 16, and Form 26AS, were provided to support the claim. It was pointed out that the employer had made errors while uploading TDS data, which led to a mismatch in Form 26AS. He argued that such mistakes by the employer should not result in extra tax liability for the assessee, especially when the correct income was clearly shown and supported by verifiable records.
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The departmental representative, on the other hand, relied on the order passed by the CIT(A).
The two member bench comprising Pawan Singh( Judicial Member) and Girish Agrawal (Accountant Member) heard both sides and found that the addition was made due to a mismatch between Form 26AS and Form 16, caused by errors in the employer’s TDS filing. The assessee had submitted relevant documents to support the claim.
Considering the facts, the appellate tribunal sent the matter back to the JAO for limited verification. The officer was directed to check the details, verify them with the employer if needed, and give the assessee a fair chance to respond. A fresh order was to be passed after proper verification as per law.
In short,the appeal was allowed for statistical purposes.
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