2023 (7) TMI 344 - AT - Income Tax

ITAT Hyderabad remands case to verify if Rs. 2.25 lacs receipt is exempt survival benefit from LIC.

Rajiv Venkataraman, Secunderabad Versus Assistant Commissioner of Income Tax, Circle-2 (2), Hyderabad

Rajiv Venkataraman, Secunderabad Versus Assistant Commissioner of Income Tax, Circle-2 (2), Hyderabad - TMI Issues involved:The issues involved in this case are related to the difference in income disclosed in the return of income and Form No. 26AS, addition of sums to the income of the assessee, rejection of rectification application by CPC, and the claim of exempt income made by the assessee for the first time through rectification application.Summary:1. Difference in Income Disclosure:The assessee filed the return of income based on entries in Form No. 26AS, but there was a variance in the amounts mentioned in Form No. 26AS and the income disclosed in the return. The appeal pertains to a sum mentioned as other sources amounting to Rs. 2,52,352, which includes amounts added due to non-filling of schedule PTI and receipt of a survival benefit from LIC.2. Rejection of Rectification Application:The assessee's application for rectification, claiming exemption of Rs. 2.25 lacs and explaining the difference in another amount, was rejected by the CPC. The Ld. CIT(A) accepted part of the explanation but rejected the claim of exempt income as it was made for the first time through rectification application.3. Legal Interpretation of Exempt Income Claim:The assessee contended that the claim of exempt income through rectification application is permissible, citing legal precedents. The AR argued that disclosing non-taxable receipts does not alter the total income returned initially, and there is no legal obligation to disclose exempt income separately in the return form.4. Consideration of Exempt Income Claim:The Ld. CIT(A) rejected the claim of exempt income made through rectification application, stating it was impermissible in law. However, the Hon'ble Apex Court's decision allows raising legal points before appellate authorities without the need for new documents or facts.5. Decision and Order:The ITAT Hyderabad set aside the impugned order and remanded the issue to the Assessing Officer to verify if the receipt of Rs. 2.25 lacs is indeed an exempt survival benefit from LIC. The grounds of appeal were treated as allowed for statistical purposes, and the appeal of the assessee was considered allowed.This summary provides a detailed overview of the issues involved in the legal judgment, the arguments presented by both sides, and the final decision rendered by the ITAT Hyderabad.