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Facts
The assessee filed a return declaring 'nil' income, but an insurance claim of ₹19,33,408/- was declared. The Tax Audit Report (TAR) reflected this amount in two places, leading to a mismatch with the Return of Income (RoI). The CPC made an addition, and the CIT(A) dismissed the assessee's appeal.
Held
The Tribunal noted that the mistake in declaring the insurance claim in duplicate was likely due to software complexity. In the interest of justice, the appeal was set aside and restored to the JAO for verification.
Key Issues
Whether the duplicate reporting of an insurance claim in the Return of Income and Tax Audit Report, due to software complexity, warrants an addition by the CPC and dismissal by the CIT(A).
Sections Cited
143(1), 28, 44DB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI AMITABH SHUKLA
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/Addl./JCIT(A)-2, Hyderabad, (hereinafter referred to as ‘Ld.CIT(A)‘), dated 16.02.2025 for the Assessment Year (hereinafter referred to as ‘AY‘) 2023-24.
At the outset, the Ld.AR of the assessee submitted that the assessee had filed its Return of Income (RoI) for AY 2023-24 on 28.08.2023 declaring ‘nil’ income and sought tax refund to the tune of ₹1,190/-. The return was processed by the CPC u/s.143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘); and finding inconsistency between the Tax Audit Report (TAR) and the return filed by the assessee [assessee had inadvertently declared an amount of ₹19,33,408/- which was received as insurance claim in Sl.No.5(d) of the return whereas in the TAR in Form 3CD reflected the same at two (2)
places] the CPC made adjustment and raised a demand of ₹6,98,670/- in its intimation order u/s.143(1) of the Act dated 02.02.2024. The assessee realizing the mistake immediately filed a revised return declaring the said insurance claim of ₹19,33,408/- in Sl.No.5(a) in the return and thereafter, filed the appeal before the Ld.CIT(A), who was of the view that the assessee in the revised ITR on 14.02.2024 has again disclosed the same amount under the same head as disclosed in the original ITR.
Additionally ₹19,33,408/- was also disclosed against the “item falling within the scope of Section 28 of the Act”. Thus, the Ld.CIT(A) noted that in the revised return, assessee has disclosed the total amount of ₹38,66,816/- under the heading “amount not credited to P & L account” against total amount of ₹19,33,408/- disclosed in the original ITR under the same head. Therefore, the Ld.CIT(A) was pleased to dismiss the appeal of the assessee. Before us, the Ld.AR submitted that for AY 2023- 24, the assessee’s firm had filed its original RoI on 28.08.2023 declaring ‘nil’ income and in its ITR, it declared insurance claim receipt of ₹19,33,408/- as under:
PART A-OTHER INFORMATION
Amounts not credited into the Profit and Loss Account being, a) the items falling within the scope of section 28 ---- Nil b) - c) - d) Any other item of income ₹19,33,408 f) Total amounts not credited into P&L A/c ₹19,33,402
SCHEDULE BP - COMPUTATION OF INCOME FROM BUSINESS OR PROFESSION
Any other item or items of addition under section ₹19,33,408 28 to 44DB
However, while uploading the TAR in Form 3CD, the same insurance claim was reflected in duplicate in two (2) places as under:
Amounts not credited to the Profit and Loss account being,
a) the items falling within the scope of section 28 ₹19,33,408/- [Insurance Claim] ---- b) - c) - d) any other item of income [Insurance Claim] ---- ₹19,33,408/-
The CPC taking note of the mismatch between the Sl.No.5(a) of Part Other Information (OI) of the ITR and Sl.No.16(a) of the TAR has made the addition of ₹19,33,408/-. According to the Ld.AR, the double entry of the insurance claim receipt led to the CPC making an addition of ₹19,33,408/- was due to inadvertent mistake which the Ld.CIT(A) couldn’t appreciate and therefore, prayed that the matter may be remanded to the file of the Jurisdictional Assessing Officer [JAO] and given an opportunity, the assessee would be able to show before the JAO that this was an inadvertent error while filing the ITR & TAR.
5. Per contra, the Ld.DR supported the action of the Ld.CIT(A) and he does not want us to interfere.
Having heard both parties and after perusal of the records, we note that the assessee firm had filed its original RoI on 28.08.2023 declaring ‘nil’ income and in its ITR declared insurance claim receipt of ₹19,33,408/- under Sl.No.5(a) of part other information of the ITR and showed in the Schedule-BP under Sl.No.A-23 [any other item or items of addition u/s.28 to 44DB] ₹19,33,408/- and also in its TAR in Form 3CD the insurance claim was reflected in duplicate in two (2) places as noted supra. Taking note of the mismatch, the CPC has made an addition of ₹19,33,408/- and thereafter, the assessee is noted to have filed revised return wherein also the same mistake has been repeated which is attributed to the complexity of software. Be that as it may, in the light of Article 265 of the Constitution, in the interest of justice and fair play, we set aside the impugned action of the Ld.CIT(A) and restore the issue before the JAO and direct him to verify the return as well as the claim of (AY 2023-24) M/s. Ramu & Co. the assessee [duplication of insurance claim in two (2) places] and thereafter, if it is found that due to inadvertent error, the assessee had shown the same insurance claim at two (2) places, then the addition may be deleted. Needless to say, if the assessee fails to make out its claim of duplication as discussed (supra), then the AO is at liberty to make addition as intimated by the CPC.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 04th day of September, 2025, in Chennai.