Tribunal corrects computation statement error in favor of NRI appellant

The Tribunal allowed the appeal, emphasizing that the Assessing Authority should correct mistakes in the computation statement of income, even if they benefit the assessee. The Tribunal highlighted that assessment proceedings are not adversarial and should be conducted fairly. Referring to relevant case laws and a CBDT Circular, the Tribunal concluded that the appellant, a NRI, was entitled to the relief sought due to an honest mistake in overstating long term capital gains. The appeal was allowed, directing the correction of the error in the computation statement for the assessment year 2012-2013.

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Issues:
Correction of mistake in computation statement of income.

Analysis:
The appeal was against the Commissioner of Income-tax (Appeals)'s order regarding the correction of a mistake in the computation statement of income for the assessment year 2012-2013. The appellant, a NRI, had inadvertently overstated the long term capital gain by marking the cost of acquisition as Rs. 2,00,000 instead of Rs. 20,00,000. The CIT(A) rejected the appeal on the grounds that the mistake was not part of the assessment order, no revised return was filed, and it was not a legal issue. However, the Tribunal considered the case, emphasizing that the mistake was honest and the Assessing Authority should correct it, as per judicial precedents. The Tribunal highlighted that assessment proceedings are not adversarial and the Authority should be fair in determining tax liability. Referring to relevant case laws, the Tribunal concluded that the appellant was entitled to the relief sought, and the appeal was allowed.

The Tribunal noted that the mistake was committed by the appellant, not the Assessing Authority, and a revised return could have been filed only if the mistake was noted before completion of assessment. The Tribunal emphasized that the Assessing Authority should correct any mistakes found in the computation filed by the assessee, as assessment proceedings are not adversarial. The Tribunal cited relevant case laws to support its decision, highlighting that the correction of an honest mistake should be allowed, irrespective of whether it benefits the assessee or the Revenue. The Tribunal also referred to a CBDT Circular emphasizing the need for a reasonable approach in completing assessments and granting lawful deductions to the assessee.

Moreover, the Tribunal cited a judgment of the jurisdictional High Court emphasizing the duty of the Assessing Officer to refrain from assessing non-taxable income returned by the assessee due to a mistaken understanding. The High Court's observation highlighted the quasi-judicial nature of Assessing Officers' powers and their duty to act fairly and do justice to the assessees. Based on these considerations, the Tribunal concluded that the appellant was entitled to the relief sought in the appeal and allowed the appeal, ordering accordingly.

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