PUSHPA BAI MUNAT,BADNAWAR vs. CPC, BANGALURU, BANGALURU

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ITA 125/IND/2025Status: DisposedITAT Indore31 July 2025AY 2017-185 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal agreed with the submissions made by the assessee's representative. It noted that the latest Form No. 26AS, as produced by the assessee, showed that the erroneous entry of interest of Rs. 8,24,485/- under Section 194A had been cancelled out by a negative entry of the same amount. A new entry for interest of Rs. 1,00,312/- was now appearing. The Tribunal found this to be in total agreement with the assessee's argument. Accordingly, the Tribunal directed the AO to re-process the intimation under Section 143(1) by taking into account the latest data available in Form No. 26AS and to delete the addition made in the assessee's case. The principle established is that automated processing systems should be corrected when subsequent data clarifies factual errors, especially when both parties agree to the correction based on updated departmental records.

What were the facts?

The assessee, Pushpa Bai Munat, filed her income tax return for Assessment Year 2017-18 declaring a total income of Rs. 1,00,310/-. This income was primarily from interest. The Assessing Officer (AO), processing the return under Section 143(1) via CPC, Bengaluru, noted an interest figure of Rs. 8,24,485/- from the department's database (Form No. 26AS). This discrepancy arose because M/s Vimal Urvarak Vikray Kendra, Badnawar, mistakenly reported the opening balance of a loan given by the assessee as Rs. 8,24,485/- instead of the actual interest paid to the assessee, which was Rs. 1,00,312/-. The AO made an addition based on the erroneous figure. The assessee appealed to the CIT(A), but no relief was granted. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the addition of Rs. 8,24,485/- made by the AO based on the figure in Form No. 26AS, which was later found to be a reporting error by a third party, is sustainable? (Question of law and fact, concerning Section 143(1) of the Income-tax Act, 1961). Assessee's Contention: The assessee argued that the figure of Rs. 8,24,485/- in Form No. 26AS was a reporting mistake by M/s Vimal Urvarak Vikray Kendra, Badnawar. The assessee submitted a latest Form No. 26AS showing the corrected interest income of Rs. 1,00,312/- and requested the AO to be directed to give effect to this updated information and delete the addition. Revenue's Contention: The learned DR for the revenue fairly agreed with the submission and request made by the learned AR for the assessee.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 194A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI

For Appellant: Shri Arvind Sanghvi, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 30.07.2025Pronounced: 31.07.2025

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

1.

Feeling aggrieved by order of first appeal dated 28.11.2024 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-2, Coimbatore [“CIT(A)”] which in turn arises out of intimation of assessment dated 25.09.2018 passed by CPC, Bengaluru [“AO”] u/s 143(1) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on the grounds mentioned in Form No. 36 (Appeal Memo).

Page 1 of 5 assessee-individual filed her return of AY 2017-18 u/s 139 on 05.08.2017 declaring a total income of Rs. 1,00,310/- computed on the basis of Interest from Saving Bank A/c – Rs. 84 (+) Interest from M/s Vimal Urvarak Vikray Kendra, Badnawar – Rs. 1,00,312 = Total interest income of Rs. 1,00,396 (-)

Deduction u/s 80TTA in respect of interest from Saving Bank A/c – Rs. 84 = 1,00,312/- rounded off to Rs. 1,00,310/-. However, the AO, while processing return of assessee, picked interest figure of Rs. 8,24,485/- from database of department (Form No. 26AS). This figure of Rs. 8,24,485/- had, at that time, appeared in Form No. 26AS from the details filed by M/s Vimal Urvarak Vikray Kendra, Badnawar. Actually, M/s Vimal Urvarak Vikray Kendra, Badnawar made a reporting mistake in their statements filed to department whereby they reported opening balance of loan given by assessee to them at Rs. 8,24,485/- instead of interest of Rs. 1,00,312/- paid by them to assessee. Since it was an automated processing of assessee’s return u/s 143(1), the departmental system picked the figure of Rs. 8,24,485/- and made addition accordingly. The assessee contested matter in first-appeal before CIT(A) and filed evidences but the CIT(A) has not given any relief. Therefore, the assessee has come in next appeal before us.

3.

We have heard the learned Representatives of both sides and carefully perused the documents to which our attention has been drawn. Ld. AR for assessee has filed a copy of latest Form No. 26AS downloaded from the Page 2 of 5 demonstrate that the error made by M/s Vimal Urvarak Vikray Kendra, Badnawar stands rectified and the interest income now appearing in latest Form No. 26AS is Rs. 1,00,312/-. Accordingly, the AO must be directed to give effect to latest information available in departmental data (Form No. 26AS) and delete the addition made.

4.

Ld. DR for revenue is fair enough in agreeing to the submission and request made by Ld. AR.

5.

After a careful consideration, we agree with the submissions made by Ld. AR. For immediate reference, the latest Form No. 26AS filed by assessee in Paper-Book is scanned and re-produced below:

Page 4 of 5 interest u/s 194A of Rs. 8,24,485/- has been cancelled out by a negative entry of same amount and the new entry of interest of Rs. 1,00,312/- is now appearing. Therefore, we are in total agreement with the submission of Ld.

AR and accordingly direct the AO to re-process the intimation u/s 143(1) by taking into account the latest data in Form No. 26AS and delete the addition made in assessee’s case. This appeal is allowed accordingly.

7.

Resultantly, this appeal is allowed.

Order pronounced in open court on 31/07/2025

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