SHAMRAO VITHAL CO.OP.BANK EMPLOYEES GRATUITY FUND,MUMBAI vs. DCIT1(3)(1), MUMBAI

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2022-23 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-1, Vishakhapatnam [CIT(A)] dated 06-02-2026in the matter of a rectification intimation issued by CPC u/s 154 on 20-09- 2025. 2. The brief facts leading to the present appeal are that the assessee is an Association of Persons (AOP) established on 24-07-

2000. It is a duly recognized Gratuity Gund under the provisions of Income Tax Act and accordingly, the provisions of Sec.10(25)(iv) are applicable to assessee which provide exemption to assessee’s income. This is an undisputed fact. The dispute arises in view of the fact that the assessee, due to inadvertent mistake, filed income tax return for this year, by claiming exemption u/s 12A instead of claiming exemption u/s 10(25)(iv). Accordingly, the claim stood rejected by CPC u/s 143(1) as well as u/s 154. During first appeal, the assessee stated that the exemption u/s 12A was claimed due to inadvertent and technical error and the Income Tax portal would not permit revision of return once it is filed under incorrect head. However, Ld. CIT(A) rejected the claim on the ground that the assessee did not revise its return of income. Aggrieved, the assessee is in further appeal before us. 3. The undisputed fact that emerges is that the assessee is an approved gratuity fund and eligible for exemption u/s 10(25)(iv). The assessee, by mistake, as in earlier years, has filed ITR-7 for this year and claimed exemption u/s 12A whereas, as per extant rules, it was required to file ITR-5 and claim deduction under the correct head. Such types of mistakes, apparently, could not be corrected by way of revised return of income. Therefore, the assessee has been casted with impossible task of revising its return of income, which is not, at all, permitted by Income Tax portal. In our considered opinion, the applicable exemption could not be denied on mere technical errors. In the past, the assessee has filed its ITR-7 only which has been accepted. However, in this year, due to change in extant rules, the

assessee was required to fileITR-5 which could not be done under a bona-fide belief. Therefore, the same is merely an inadvertent error which could not jeopardize the exemption claim of the assessee. Therefore, we direct CPC / AO to grant impugned exemption u/s 10(25)(iv) and re-compute the income of the assessee. 4. The appeal stand allowed. Order pronounced on 11th June, 2026 Sd/- Sd/-

(PAWAN SINGH) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER ANKIT, PS Dated: 11-06-2026 आदेश की प्रनिनलनप अग्रेनर्ि /Copy of the Order forwarded to : 1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3. आयकरआयुक्त/CIT 4. ववभागीयप्रवतवनवि/DR 5. गार्डफाईल/GF ASSISTANT REGISTRAR

ITAT MUMBAI