Tribunal corrects income tax return error, rules in favor of assessee

The Tribunal ruled in favor of the assessee, directing the AO to delete the income addition resulting from a punching error in the income tax return. Despite the rejection of the rectification application under section 154 of the IT Act, the Tribunal considered evidence from Form No. 26AS and bank account summaries to support the correct income amount. Emphasizing the possibility of clerical errors during electronic filing, the Tribunal allowed the appeal and instructed the AO to rectify the taxation error caused by the human error in data entry.

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Issues involved:
1. Rectification application rejection by AO under section 154 of IT Act.
2. Addition of income due to human error in filling ITR.

Analysis:

Issue 1: Rectification application rejection under section 154 of IT Act
The appeal arose from the order of the ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC) against the order of assessment passed under section 154 of the Income Tax Act, 1961. The assessee contended that the AO erred in rejecting the rectification application filed under section 154 of the IT Act. The assessee had committed a punching error while filling the income tax return, mistakenly mentioning professional fees of Rs. 81,00,051 instead of the actual amount of Rs. 8,10,051. Despite evidence from Form No. 26AS and bank account summaries supporting the correct amount, the rectification petition was not accepted. The Tribunal considered similar cases where clerical errors occurred in electronic filing, emphasizing the possibility of errors during data entry. Referring to a previous decision, the Tribunal directed the AO to delete the addition made due to the punching error, ultimately allowing the grounds raised by the assessee.

Issue 2: Addition of income due to human error in filling ITR
The primary question to be decided was whether the Revenue was justified in confirming the addition of Rs. 72,90,000 towards the assessee's income from profession, considering the circumstances of the case. The assessee admitted to the punching error in the income tax return, supported by evidence from Form No. 26AS and bank account summaries. The Tribunal noted that the error led to the assessee being taxed on income not earned, as the correct amount was Rs. 8,10,051. Citing a Co-ordinate Bench decision, the Tribunal highlighted the system of e-filing returns and the possibility of clerical errors during data entry. Relying on this precedent, the Tribunal directed the AO to delete the addition made due to the punching error, thereby allowing the appeal of the assessee.

In conclusion, the Tribunal ruled in favor of the assessee, directing the AO to delete the addition made due to the punching error in the income tax return. The decision was based on the evidence provided by the assessee, highlighting the clerical error in data entry and the consequent incorrect taxation of income.

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