VIKAS MANDGE,DURG vs. INCOME TAX OFFICER - 2(1), BILASPUR

The present appeal filed by the assessee is directed against the order passed by the CIT (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 27.07.2021, which in turn arises from the order passed by the A.O under Sec. 154 of the Income-tax Act, 1961 (in short ‘the Act’) for assessment year 2010-11. Before us the assessee has assailed the impugned order on the following solitary effective ground of appeal:

Succinctly stated, the assessee, a retired employee of State Bank of India had e-filed his return of income for assessment year 2010-11 on 24.07.2020, declaring a total income of Rs.4,04,298/-, against which the tax liability of Rs.15,306/- was reflected. Subsequently, a revised return of income was filed on 26.07.2010, disclosing an income of Rs.40,42,980/-, against which the tax liability Rs.15,306/- (as reflected in the original return of income) was reflected. On the basis of the revised return of income a demand of Rs.13,23,120/- was raised against the assessee. On learning about the aforesaid demand, the assessee approached the ITO-2, Bilaspur, who therein scaled up the outstanding demand to an amount of Rs.25,85,818/-. Backed by the aforesaid facts, the assessee filed with the A.O an application u/s.154 of the Act, wherein it was stated by him that in the revised return the total income was wrongly shown at Rs.40,42,980/-, i.e., just by adding one “Zero” to the figure of total income that was shown in the original return. However, the aforesaid application filed by the assessee seeking rectification of the mistake in his revised return of income did not find favour with the Assessing Officer who vide his order dated 26.06.2019 dismissed the same.

As is disenable from records, it is the claim of the assessee that as the aforesaid order of the Assessing Officer rejecting his application for rectification u/s 154 of the Act was forwarded by the department by e- mail, which was not checked by him on day to day basis, therefore, by the time he learnt about the same, the time limit prescribed for assailing the said order of the A.O by preferring an appeal before the CIT(A) had already lapsed. Accordingly, the assessee assailed the order passed by Assessing Officer rejecting his application seeking rectification of mistake in the revised return, before the CIT(Appeals), which therein involved a delay of 42 days. After considering the facts leading to the delay in filing of the appeal, the CIT(A), in all fairness, though condoned the same, but not finding favour with the contentions advanced by the assessee, therein, dismissed the appeal.

On a perusal of the order of the CIT(A), we find that it was observed by him that as the revised return that was e-filed by the assessee from his own e-filing account and was duly verified by him, therefore, the same could not have been ignored by the Assessing Officer/CPC. In the backdrop of his aforesaid observation, the CIT(A) was of the view that the action of the Assessing Officer in rejecting the application filed by assessee u/s 154 of the Act seeking rectification of a mistake in the revised return of income did not suffer from any infirmity.

Being aggrieved the assessee has assailed the impugned order passed by the CIT(A) upholding the rejection of his application for rectification of a mistake in the revised return of income by the Assessing Officer before us. Controversy involved in the present appeal lies in a narrow compass, i.e., as to whether or not the CIT (Appeals) is right in law and the facts of the case in concluding that the assessee’s application u/s.154 of the Act seeking rectification of mistake in the revised return of income was not maintainable?

Shorn of unnecessary details, we may herein observe that a conjoint perusal of the original return of income filed by the assessee u/s. 139(1) of the Act and the revised return of income filed by him u/s.139(4) of the Act, therein reveals that except for the variance in the returned income in the said respective returns, all other figures remained the same. As observed by us hereinabove, the assessee had though in his revised return of income disclosed a gross total income of Rs.40,42,980/- as against that of Rs.4,04,298/- in his original return, however, the tax liability in both the said returns had remained unchanged and was static at an amount of Rs.15,306/-. At this stage, we may herein observe, that it is beyond the comprehension that the tax liability on the returned income (as revised) of Rs.40,42,980/- would work out at Rs.15,306/-. Be that as it may, we cannot also remain oblivious of the fact that the gross total income of the assessee only comprises of salary income which was derived by him as an employee i.e. Special Assistant with State Bank of India, Branch Bilaspur. On a perusal of the “Form-16” (Page 5 & 6 of APB), we find that gross salary income of the assessee was reflected at Rs.4,04,297.90. Backed by the aforesaid facts, we have a strong conviction that there is substance in the claim of the assessee that in his revised return of income the gross total income was wrongly stated at Rs.40,42,980/- as against income of Rs.4,04,298/- (as originally returned), which mistake had crept in by wrongly suffixing one “Zero” to the amount of the income as originally returned. Our aforesaid conviction is supported by the very fact that even in the revised return of income the tax liability on the amount of income so returned i.e. Rs.40,42,980/- had been reflected at the same amount as shown in the original return of income i.e. Rs.15,306/- . In our considered view, the aforesaid facts duly lends credence to the claim of the assessee that the income reflected in the revised return of income on account of a mistake which was glaring on the very face of it was therein wrongly mentioned.

Apart from that, the very fact that the solitary source of income of the assessee i.e. salary income as an employee with State Bank of India stood reflected at Rs.4,04,298/- (supra), therein further fortifies his claim that the income of Rs.40,42,980/- (supra) reflected in the revised return suffered from a mistake which was glaring and apparent from record. At this stage, we may herein observe, that the claim of the assessee that the income reflected in the revised return i.e. Rs.40,42,980/- was inadvertently so stated by suffixing one “Zero” to the original return of income of Rs.4,04,298/- carries substantial force and could not have been summarily brushed aside in the backdrop of the aforesaid facts as had been culled out by us hereinabove.

In the totality of facts involved in the case before us, we are of a strong conviction that the income returned by the assessee in his revised return at Rs.40,42,980/- suffered from a mistake which was apparent, patent, obvious and glaring from record, which therein rendered the same amenable for rectification u/s.154 of the Act. We, thus, not being able to persuade ourselves to subscribe to the summarily dismissal of the assessee’s application u/s.154 of the Act by the Assessing Officer, which thereafter, had been upheld by the CIT(A), therein set-aside the order of the first appellate authority and quash the order passed by the Assessing Officer u/s.154 of the Act dated 26.06.2019. Accordingly, the A.O is directed to rectify the mistake as claimed by the assessee in his application filed u/s 154 of the Act. The Ground of appeal No.1 is allowed in terms of our aforesaid observations.

The Grounds of appeal Nos. 2 & 3 being general in nature, therefore, the same are dismissed as not pressed.

Resultantly, the appeal of the assessee is allowed in terms of our aforesaid observation.