DAYSPRING ENTERPRISES OF INDIA,SECUNDERABAD vs. ITO., EXEMPTION WARD-1(1), HYDERABAD

Facts

The assessee claimed exemption under Section 11 of the Income Tax Act for AY 2016-17. An assessment was completed, but the PCIT(E) set aside the order under Section 263, directing the AO to examine shortfalls in income application. The assessee admitted an inadvertent error in calculating accumulated income, leading to a perceived shortfall.

Held

The Tribunal held that the AO erred in not admitting the assessee's corrected calculation of accumulated income. The reliance on the Goetze India Ltd. case by the AO was deemed not applicable as the assessee had corrected an error rather than making a fresh claim. The order of the CIT(A) was set aside.

Key Issues

Whether the AO can reject corrected calculations of accumulated income filed by the assessee, and whether the Goetze India Ltd. judgment applies when the assessee rectifies an error in calculation rather than making a fresh claim.