2019 (4) TMI 2149 - AT - Income Tax

Invalid revised return - Considering the income as per revised Return of Income - Revised return considered not the valid return as per section 139(5) revised return was not filed against the return filed u/s 139(1) or in response to the notice issued u/s. 142(1) - As per assessee as result of punching error, an amount was entered in the return of income - difference between the original return and revised return and reasons for filing the revised return of income on the next day of filing the original return. HELD THAT - In the instant case, the appellant filed its original return of income on 16.02.2015 declaring income at Rs. 1,28,42,730/-. Thereafter, on the very next day, it filed the revised return declaring the total income at Rs. NIL . During the assessment proceeding before the AO, the appellant explained that there was a punching error while filing return in e-filing portal. Also, it was submitted by the appellant that the accountant dealing with it, has erroneously inserted figure of 12842725 in the column amounts debited to the profit and loss account, to the extent disallowable u/s 40A in Row No. 16 in Schedule BP of the return form. We find that in the instant case there was no income for the impugned assessment year and as a result of punching error, an amount of Rs. 1,28,42,730/- was entered in the return of income filed on 16.02.2015. The appellant realized the mistake and immediately corrected it by filing a revised of return of 17.02.2015. Also, revised computation income was filed in support of the revised return of income. The above mistake, being a punching error, we uphold the order of the Ld. CIT(A). Decided against revenue.

Summary

Issues:
Validity of revised return filed by the assessee under section 139(5) - Whether the revised return was valid as per the provisions of the Income Tax Act for the relevant year.

Analysis:
The appeal before the Appellate Tribunal ITAT Mumbai involved the validity of a revised return filed by the assessee for the assessment year 2014-15. The Revenue challenged the relief granted by the CIT(A) to the assessee of Rs. 1,28,42,775, arguing that the revised return was not valid under section 139(5) of the Income Tax Act. The appellant initially filed the original return on 16.02.2015, declaring income at Rs. 1,28,42,730, and then filed a revised return the next day declaring total income as Nil. The AO considered the revised return invalid due to the belated filing of the original return, and assessed the income based on the original return. The CIT(A) accepted the revised computation statement showing Nil income, emphasizing substantial justice over technicalities and directed the AO to accept the revised computation of income. The assessee explained that the original entry was due to a punching error, which was rectified by filing the revised return immediately. The Tribunal upheld the CIT(A)'s decision, considering the error as a punching error and dismissing the appeal filed by the Revenue.

The Tribunal found that the error in the return was a result of a punching error, leading to the incorrect declaration of income. The assessee promptly rectified the mistake by filing a revised return the next day, supported by a revised computation of income. The Tribunal emphasized that there was no actual income for the assessment year in question and the mistake was due to a clerical error. Therefore, the Tribunal upheld the decision of the CIT(A) to accept the revised computation of income, focusing on substantial justice and correcting the technical error. Consequently, the appeal filed by the Revenue was dismissed, affirming the decision in favor of the assessee.

In conclusion, the Tribunal's decision highlighted the importance of substantial justice and rectifying technical errors in tax assessments. The case underscored the significance of correcting inadvertent mistakes promptly and ensuring that the correct income is taxed, irrespective of minor technicalities. The judgment serves as a reminder of the judicial approach to prioritize fairness and accuracy in tax matters, especially when errors are promptly rectified in good faith.