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Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI
Before: SHRI SHAMIM YAHYA, & SHRI SUDHIR KUMAR
Asstt. Year : 2018-19 Mukesh Bansal HUF vs. ITO, Ward 34(4), Through its Karta Mukesh Bansal, Delhi B-2/41, Ashok Vihar, New Delhi – 52 (PAN: AAKHM7290N) (Appellant) (Respondent) Appellant by : Sh. Yogesh Harjai, CA & Sh. Siddarth Malhotra, Adv. Respondent by : Sh. Dheeraj Kumar Jain, Sr. DR. Date of Hearing 28.05.2025 Date of Pronouncement 28.05.2025 ORDER
PER SHAMIM YAHYA, AM :
This appeal has been filed by the Assessee against the order dated 30.07.2024 passed by the ADDL/JCIT(A), Prayagraj on the following grounds:-
1. The Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 55,06,542/- in the facts and circumstances of the case as the said income was not taxable at all as per the provisions of section 10(1) of the Income Tax Act, 1961.
2. The ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 55,06,542/- by relying on the pronouncement of Hon’ble Apex Court in the case of Wipro Limited while ignoring the contrast difference not only in the facts of both the case but also in the operation of provisions of section 10B and section 10(1).
3. The AO erred in law and on facts in confirming the addition of Rs. 55,06,542/- in the facts and circumstances of the case by taxing the income which is not otherwise taxable under the Act.
4. The Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 55,06,542/- in the facts and circumstances of the case based on a procedural and technical error taking away the substantial benefit which is otherwise provided by the law.
5. The ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 55,06,542/- in the facts and circumstances of the case by stating that the mistake committed by the appellant is not a mistake apparent from the records despite stating in the order that it is an omission on the part of the appellant. 2. Brief facts of the case are that assessee Shri Mukesh Bansal HUF filed its return of income for the AY 2018-19 declaring total income at Rs. 4,86,820/- which includes the business income as well as interest income. Apart from above, the assessee also earned agricultural income and during the previous year earned total income of Rs. 20,48,631/- which included net profit from agricultural income of Rs. 16,29,658/- i.e., Gross receipts from agriculture Rs. 55,06,542/- less expense incurred on agricultural income Rs. 38,76,884/-. The assessee while filing its ITR, claimed the said income as exempt income in Schedule-BP and accordingly reduced the same from the total income. The assessee also added back to income, the expenses that were incurred towards the exempt income i.e., the agricultural income and accordingly reported its total income at Rs. 4,86,823/- However, the assessee inadvertently omitted the reporting of the said exempt income in Schedule-EI of the ITR. The CPC, Bangalore while processing the return u/s. 143(1) of the Act, assessed the total
2 | P a g e income of assessee at Rs. 59,93,370/- as against the declared total income of Rs.4,86,823/- by adding back the entire receipts of agricultural income while disregarding the provisions of section 10(1) of the Act. Thereafter, the assessee filed a rectification application u/s. 154 for rectification of the above mentioned mistake but the same was rejected by the CPC with remarks, ‘Gross Tax Liability has been changed in the rectification application. This change is not a mistake apparent from the records’. Against the above order, assessee preferred appeal before the Ld. CIT(A). Ld. CIT(A) noted that assessee has stated that every detail was disclosed in the return and is apparent on record. The agricultural income is clearly shown in Schedule-BP, Point No. 5(c)(1), amounting to Rs. 55,06,542/-. Expenses incurred against the earning of agricultural income, amounting to Rs. 38,76,884/-, have also been disallowed, and these were disclosed in Schedule-BP, Point No.
The omission was purely unintentional. Ld. CIT(A) considered the submissions, but was not convinced. He referred the decision of Apex Court in the case of PCIT vs. Wipro Ltd. dated 11.07.2022 and decided the issue against the assessee. Ld. CIT(A) held as under:- “7.5 The contention of the appellant has been duly considered. It is noted that the exemption for agricultural income was not claimed by the appellant in the original return. The exemption in respect of agricultural income was claimed by the appellant by filing the revised return. In this context, it is important to note that an individual taxpayer is permitted to file a revised return if there were errors or omissions in the original submission. However, a new exemption / deduction cannot be claimed by just filing the revised return. 3 | P a g e
This interpretation aligns with the judgement of the Hon’ble Apex Court in the case of PCIT vs. Wipro Ltd. (2022), wherein, the court emphasized that filing a revised return under section 139(5) to assert a contradictory position or claim an exemption not previously stated in the original return is not allowed. 7.6 Taking into account the aforementioned details, I find no fault in the Assessing Officer’s decision to disallow the appellant’s claim for the benefit of exemption for agricultural income.”
Against the aforesaid order, assessee is in appeal before us.
We have heard both the parties and perused the records. Ld. Counsel for the assessee submitted that assessee earned agricultural income of Rs.55,06,542/- in the relevant year and filed a return declaring a total income of Rs.4,86,823/-, However, while the agricultural income was declared under “Schedule-BP”, which was mistakenly not reported in “Schedule-EI.” This reporting error led to the denial of the exemption and a tax demand under section 143(1) of the Act. Ld. Counsel for the assessee submitted that Ld. CIT(A) acknowledged and accepted the assessee’s contention that agricultural income of Rs. 55,06,542/- had been duly reported in “Schedule-BP” but dismissed the appeal. Ld. Counsel for the asseseee submitted that exemption in Wipro Ltd., case was claimed u/s. 10B which was optional and conditional as against exemption in instant case which is absolute and hence the case is not applicable in the instant matter at hand. He further referred the decision of ITAT, Bangalore in the case of Goodwill Management (P) Ltd. vs. DCIT (CPC)
4 | P a g e Bangalore wherein, on identical circumstances the issue has been decided in favour of the assessee. Similarly, he further placed reliance on the decision of the M/s Socomed Pharma Pvt. Ltd. Belapur vs. Commissioner of Central Excise, Raigarh [2015 (3) TMI 86.
Per contra, Ld. DR submitted that the matter should be remanded back to the file of the Assessing Officer.
We have carefully considered the submissions. We find considerable cogency in the assessee’s submissions that assessee has duly declared income in “Schedule-BP” and has also added back the expenses for earning exempt income, but it was mistakenly not reported in “Schedule-EI”. In the case of Goodwill Management P Ltd. vs. DCIT (CPC) Bangalore (Supra) assessee has claimed dividend income of Rs. 13.37 lacs as exempt income. However, the assessee omitted to fill the details of exempt income in “Schedule-EI” in the statutory return form prescribed for filing returns. The Bench had noted that assessee had mentioned that the dividend income of Rs. 13.37 lacs is exempted in “Schedule-BP” relating to computation of “income from business”. Considering this aspect, the Tribunal has decided the issue in favour of the assessee as under:-
“7. The facts in the present case are identical. The assessee, out of ignorance or inadvertence has omitted to mention the details 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 5 | P a g e exemption, which is otherwise allowable under the Act. It is also not a case that 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, I am of the view that the said mistake deserves to be rectified.
Accordingly, I set aside the order passed by the Ld. CIT(A) on this issue and direct the AO to allow the exemption claimed by the assessee.”
6.1 Similarly, in the case of M/s Socomed Pharma Pvt. Ltd. Belapur vs. Commissioner of Central Excise, Raigarh in connection with denial of rebate claimed, following exposition was made. “8. Simply ticking a wrong declaration in ARE-1 form cannot be a basis for rejecting the substantial benefit of rebate claim. Under such circumstances, the rebate claims cannot be rejected for procedural lapses of wrong ticking. In catena of judgments, the Government of India has held that benefit of rebate claim cannot be denied for minor procedural infraction when substantial compliance of provisions of notification and rules is made by claimant. – Government finds that once the merits of rebate claims, found to be in favour of applicants, the sanction of same cannot be treated as erroneous and hence, no recovery is warranted. – Decided in favour of assessee.”
Considering the aforesaid facts and circumstances on the touchstone by the aforesaid case laws, we find that assessee’s mistake in not filing of exempt income in Schedule-EI is unintentional and other facts were duly disclosed in the return of income i.e. reporting in “Schedule-BP” and the disclosure of expenses in relation to the exempt income duly mandated that assessee’s claim deserve to be allowed. Hence, respectfully following the aforesaid precedents, we decide the issue in favour of the assessee.