2023 (2) TMI 336 - AT - Income Tax

Rectification of mistake u/s 154 - Addition towards income from profession of the assessee - assessee had indeed made punching error only while filling the income tax return by adding one more 0 (Zero) - assessee pleaded that while filling up the income tax return, the assessee had committed the punching error by mentioning the professional fee of Rs.81,00,051/- erroneously as against the actual fee of Rs.8,10,051/- - HELD THAT - Since the assessee had filed its original return of income belatedly on 13/02/2016, the assessee was prevented from filing the revised return. Hence, the assessee filed a rectification petition u/s.154 of the Act before the ld. CPC which was not accepted. We have gone through the bank account summary of the assessee for the whole year which are enclosed wherein it is evident that assessee has actually received professional income from Power Tech Services only to the tune of Rs.7,62,444/- net of TDS. Hence, the addition that has been made due to punching error had resulted in a scenario of assessee getting taxed on an income which he had never earned. Assessee has also filed an affidavit in this regard admitting the punching error that had crept in while filling the income tax return. We find under similar circumstances, the Co-ordinate Bench of this Tribunal had an occasion to consider the negligible error that had crept in, in the electronic filing of returns in the case of Shrikant Real Estates (P) Ltd. 2012 (10) TMI 854 - ITAT MUMBAI - Thus we direct the ld. AO to delete the addition made in the sum due to punching error. Accordingly, the grounds raised by the assessee are allowed.

Summary

Issues involved:
1. Rectification application rejection by AO under section 154 of IT Act.
2. Addition of income due to human error in filling ITR.

Analysis:

Issue 1: Rectification application rejection under section 154 of IT Act
The appeal arose from the order of the ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC) against the order of assessment passed under section 154 of the Income Tax Act, 1961. The assessee contended that the AO erred in rejecting the rectification application filed under section 154 of the IT Act. The assessee had committed a punching error while filling the income tax return, mistakenly mentioning professional fees of Rs. 81,00,051 instead of the actual amount of Rs. 8,10,051. Despite evidence from Form No. 26AS and bank account summaries supporting the correct amount, the rectification petition was not accepted. The Tribunal considered similar cases where clerical errors occurred in electronic filing, emphasizing the possibility of errors during data entry. Referring to a previous decision, the Tribunal directed the AO to delete the addition made due to the punching error, ultimately allowing the grounds raised by the assessee.

Issue 2: Addition of income due to human error in filling ITR
The primary question to be decided was whether the Revenue was justified in confirming the addition of Rs. 72,90,000 towards the assessee's income from profession, considering the circumstances of the case. The assessee admitted to the punching error in the income tax return, supported by evidence from Form No. 26AS and bank account summaries. The Tribunal noted that the error led to the assessee being taxed on income not earned, as the correct amount was Rs. 8,10,051. Citing a Co-ordinate Bench decision, the Tribunal highlighted the system of e-filing returns and the possibility of clerical errors during data entry. Relying on this precedent, the Tribunal directed the AO to delete the addition made due to the punching error, thereby allowing the appeal of the assessee.

In conclusion, the Tribunal ruled in favor of the assessee, directing the AO to delete the addition made due to the punching error in the income tax return. The decision was based on the evidence provided by the assessee, highlighting the clerical error in data entry and the consequent incorrect taxation of income.