Tribunal grants deduction under Chapter-VIA for Assessment Year, emphasizing error rectifiability.

The Tribunal ruled in favor of the appellant, directing the AO to grant the deduction claimed under Chapter-VIA for the impugned Assessment Year. The decision emphasized the rectifiability of errors under section 154 and the appellant's compliance with relevant provisions for claiming deductions under the Income Tax Act. The consistent allowance of deductions in similar circumstances supported the finding that the denial of deduction was a computational mistake, leading to the Tribunal setting aside the CIT(A)'s decision and allowing the appeal.

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Issues:
Claim of deduction under Chapter-VIA denied by CPC in 143(1) proceedings - Whether allowable as a mistake apparent on record.

Analysis:

Issue 1: Claim of deduction under Chapter-VIA denied by CPC

The appellant, a charitable trust registered under section 12A of the Income Tax Act, filed its return of income as an Association of Persons (AOP) for the Assessment Year (AY) 2014-15. The appellant made donations eligible for deduction under sections 80G and 80GGA r.w.s 35AC of the Act. However, the CPC denied the deduction claimed under Chapter-VIA without providing a hearing opportunity. The appellant filed a rectification petition under section 154, which was rejected by the CPC. The CIT(A) dismissed the appeal stating the rectification sought was debatable. The appellant argued that in the preceding and succeeding AYs, similar deductions were allowed by the Department, indicating a computational error in the current AY. The appellant provided evidence of eligible donations, uncontested by the Department, and the denial of deduction was deemed a rectifiable error under section 154.

Issue 2: Allowability of denied deduction as a mistake apparent on record

The Tribunal observed that in previous and subsequent AYs, the appellant's deduction claims under section 80G/80GGA were accepted by the Department. The consistent allowance of deductions in similar circumstances highlighted the error in disallowing the appellant's claim in the impugned AY. The Tribunal noted that the appellant's donations were legitimate and not under suspicion, making the denial of deduction a computational mistake. Therefore, the Tribunal set aside the CIT(A)'s decision, allowing the appellant's appeal and directing the AO to grant the deduction claimed under Chapter-VIA. The decision emphasized the rectifiability of the error under section 154 and the appellant's compliance with relevant provisions for claiming deductions under the Act.

In conclusion, the Tribunal ruled in favor of the appellant, highlighting the consistent allowance of deductions in similar situations, and directed the AO to grant the deduction claimed under Chapter-VIA for the impugned AY. The judgment underscored the rectifiability of computational errors under section 154 and the importance of evidence-backed claims for deductions under the Income Tax Act.

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