BHARATI SINGH,NEW DELHI vs. ASSISTANT COMMISIONER OF INCOME TAX, CIVIC CENTRE

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ITA 2799/DEL/2026Status: DisposedITAT Delhi14 July 2026AY 2009-104 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the inclusion of dividend from mutual funds, interest on RBI tax-free bonds, and interest on UTI tax-free bonds in the total income was indeed an inadvertent mistake by the assessee. While the assessee had included these amounts under the head 'income from other sources', the crucial fact was that the details of these exempt incomes were duly filed in Schedule-E at page 20 of the ITR-4. The Tribunal found that neither the Assessing Officer nor the CIT(A) disputed the exempt nature of these incomes. The Tribunal reasoned that the lower authorities should have examined the details of exempt income provided by the assessee. Therefore, the Tribunal deleted the addition of these exempt incomes from the total income and directed the Assessing Officer to exclude them for the purpose of computation of tax liability. The ratio decidendi is that where exempt income is clearly disclosed in the return, even if mistakenly included in taxable income, a rectification application under Section 154 can be allowed to correct such a mistake apparent from the record, provided the exempt nature is not disputed.

What were the facts?

The assessee, Ms. Bharati Singh, filed appeals before the Income Tax Appellate Tribunal (ITAT) challenging orders of the learned Addl./JCIT(A)-2, Pune, for Assessment Years 2008-09 and 2009-10. The original returns were processed under Section 143(1) by the Assessing Officer, CPC, Bangalore. The assessee subsequently filed rectification applications under Section 154, which were rejected. The dispute pertains to the inclusion of exempt income, specifically dividend from mutual funds and interest from RBI and UTI tax-free bonds, totaling ₹5,05,407/- across both assessment years, in the total income. The assessee contended that this inclusion was an inadvertent mistake, and the exempt income was detailed in Schedule E-1 of the ITR-4. The Assessing Officer and CIT(A) rejected the rectification applications, relying on the Supreme Court's decision in Goetz (India) Ltd. vs. CIT, which held that claims not made in a revised return cannot be entertained through rectification.

What were the issues?

1. Whether the inclusion of exempt income (dividend from mutual funds, interest on RBI tax-free bonds, and interest on UTI tax-free bonds) in the total income, which was later sought to be rectified under Section 154, constitutes a mistake apparent from the record, considering the assessee had disclosed these incomes in the exempt income schedule. Assessee's contentions: The assessee argued that the inclusion of exempt income in the total income was an inadvertent mistake. Although the income was not claimed as exempt in the original return, it was clearly disclosed in the details of exempt income in Schedule E-1 of the ITR-4. The Assessing Officer and CIT(A) erred by rejecting the rectification application solely based on the Goetz (India) Ltd. judgment, without considering the factual disclosure of exempt income. Revenue's contentions: The revenue, through the learned Senior DR, did not dispute that these incomes were exempt and could not be included in the total income. However, they supported the orders of the lower authorities who rejected the rectification application based on the principle laid down in Goetz (India) Ltd. vs. CIT, which restricts claims made otherwise than by a revised return.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 154,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’ : NEW DELHI

Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL

For Appellant: Shri R.K. Kapoor, CA
For Respondent: Shri Tarun Sharda, Senior DR
Hearing: 13.07.2026Pronounced: 13.07.2026

2 ITA-2798 & 2799/Del/2026

3 ITA-2798 & 2799/Del/2026

4 ITA-2798 & 2799/Del/2026

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