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2021 (4) TMI 1003 - AT - Income TaxDisallowance of dividend income as exempt in Schedule BP relating to computation of business income - inadvertent error committed by the assessee while filling up the return of income filed through electronic mode - details of exempt income were mentioned in the schedule EI of the return of income - HELD THAT - An identical issue was examined by the Mumbai bench of Tribunal in the case of Suman Chandra G. Mehta 2013 (12) TMI 358 - ITAT MUMBAI The facts in the present case are identical. The assessee, out of ignorance or inadvertence has omitted to mention the details of exempt income in the relevant Schedule EI . So, the ignorance of the assessee or inadvertent mistake committed by the assessee should not come in his way in claiming exemption, which is otherwise allowable under the Act. It is also not a case that the assessee did not respond to the notice issued by CPC. The assessee has duly responded to the same, but it is the submission of revenue that the assessee should have filed a revised return of income. There is no dispute with regard to the fact that the assessee is entitled for exemption of dividend income. The object of assessment is to determine correct total income of the assessee. Accordingly, I am of the view that the right of the assessee could not be denied merely on accounting of technical errors. Hence there is a mistake apparent from record in not granting exemption claimed by the assessee. Accordingly, the said mistake deserves to be rectified. We set aside the order passed by Ld. CIT(A) on this issue and direct the A.O. to allow the exemption claimed by the assessee.
Issues:
Adjustment made to total income in intimation under section 143(1) of the Income-tax Act, 1961. Issue Analysis: 1. Background and Adjustment Made: - The appeal was against the order confirming the adjustment made to the total income in the intimation issued under section 143(1) of the Income-tax Act, 1961. - The assessee declared Nil income but claimed dividend income as exempt, which was not reported in the prescribed schedule EI, leading to the denial of exemption by the Centralised Processing Centre (CPC). 2. Decision of Ld. CIT(A) and Assessee's Appeal: - The Ld. CIT(A) upheld the adjustment, noting the omission of exempt income details in schedule EI and the failure to file a revised return despite CPC's communication. - The assessee contended that the error was inadvertent and should not disentitle the exemption, citing relevant case laws. 3. Arguments and Tribunal's Analysis: - The Ld. A.R. argued that the exemption should be allowed as the dividend income was not taxable under the Act, and the error was unintentional. - The Ld. D.R. supported the CIT(A)'s decision, emphasizing the absence of exempt income details in schedule EI. - The Tribunal examined whether the inadvertent error should prevent the assessee from claiming the allowable exemption. 4. Tribunal's Decision and Rationale: - Referring to precedent cases, the Tribunal emphasized rectifying errors for fair treatment of taxpayers and restoring the issue to the Assessing Officer (A.O.) for proper examination. - The Tribunal held that the technical error should not deny the assessee's right to exemption, as the objective is to determine the correct total income. - Consequently, the Tribunal set aside the CIT(A)'s order and directed the A.O. to allow the claimed exemption, acknowledging the mistake apparent from the record. 5. Conclusion: - The Tribunal allowed the appeal, recognizing the unintentional error by the assessee and the need to rectify the denial of exemption, ensuring fair treatment and adherence to the provisions of the Income-tax Act, 1961. This detailed analysis highlights the key legal aspects, arguments, and the Tribunal's decision regarding the adjustment made to the total income in the intimation under section 143(1) of the Income-tax Act, 1961.
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