ITAT Jaipur: Clerical Error in Return Filing u/s 153A Corrected, Loss Carry Forward Disallowance Overturned.

The ITAT Jaipur ruled in favor of the assessee, overturning the lower authorities' decisions. The Tribunal determined that the correction in the return filed under section 153A was a rectification of a clerical error, not a fresh claim. Consequently, the disallowance of the loss to be carried forward was deemed incorrect.

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Issues:
1. Disallowance of loss to be carried forward due to clerical error.
2. Whether a fresh claim can be filed in the return filed under section 153A of the Act.

Issue 1: Disallowance of loss to be carried forward due to clerical error:
The assessee filed an appeal against the order of the ld. CIT(A)- 4, Jaipur confirming the disallowance of loss to be carried forward, which was caused by the addition of income tax expenses due to a clerical error. The Assessing Officer (AO) did not allow the excess loss claimed by the assessee in the return filed under section 153A, holding that only the loss claimed in the original return filed under section 139(1) would be allowed. The CIT(A) relied on the decision of the Hon’ble Rajasthan High Court in a specific case and upheld the disallowance of the loss. The assessee argued that the difference in the loss claimed in the two returns was due to a clerical error of doubly adding the income tax expense. The assessee rectified this mistake in the return filed under section 153A, where no fresh claim was made, only the clerical error was rectified. The Tribunal found that the disallowance of the income tax expense twice was a mistake apparent on record, and the assessee was correcting the error, not making a fresh claim. The Tribunal held that the disallowance was incorrect, and the decision of the lower authorities was set aside in favor of the assessee.

Issue 2: Fresh claim in the return filed under section 153A of the Act:
The Revenue argued that the revised loss claimed in the return filed under section 153A was a fresh claim that could not be allowed, citing the decision of the Hon’ble Rajasthan High Court. The Revenue contended that since the original return of income was filed earlier, the assessee had ample time to file a revised return, which was not done. The Tribunal, however, noted that the correction made by the assessee in the return under section 153A was not a fresh claim but a rectification of a mistake in the original return. The Tribunal emphasized that the disallowance of the income tax expense twice was an error that needed correction, and there was no new claim being made. Additionally, the Tribunal highlighted that the assessee could have rectified the mistake under section 154 before the expiry of the time limit, and filing the corrected return under section 153A was a valid course of action. Therefore, the Tribunal ruled in favor of the assessee, setting aside the decisions of the lower authorities.

In conclusion, the Appellate Tribunal ITAT Jaipur ruled in favor of the assessee, allowing the appeal against the disallowance of loss to be carried forward due to a clerical error and rejecting the contention that a fresh claim was made in the return filed under section 153A of the Act. The Tribunal found that the correction made by the assessee was a rectification of a mistake, not a new claim, and therefore, the decision of the lower authorities was set aside.

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