By Rasheela Basheer – On April 17, 2022 9:16 pm
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has held that a mere mistake in the filing of return of income would not result into enhancement of income of the assessee.
the assessee trust earned income of Rs.517.39 Lacs and incurred expenditure of Rs.555.57 Lacs for the object of the trust. The excess application of income, thus was Rs.38.17 Lacs. However, the assessee disallowed an amount of Rs.48.69 Lacs u/s 40(a)(ia) and computed net income of Rs.10.51 Lacs which has been offered to tax and due taxes have been paid thereon. The CPC, vide communication dated 20.03.2020, proposed an adjustment of Rs.38.17 Lacs since the additions were on account on noncompliance of the provisions of the Act and therefore, the exemption as applicable to Trust on this income would not be available to the assessee.
Holding that the assessee trust is duly registered u/s 12AA of the Act and is eligible to claim deduction as applicable to a charitable trust, the Tribunal held that while correctly applying the provisions of law, the assessee’s income is to be computed as Rs.10,51,705/-.
“Merely because there is mistake in filing the corresponding columns in the return of income, the same would not result into enhancement of the assessee’s income. Therefore, we direct CPC to rectify the intimation and compute the income as Rs.10,51,705/- as offered by the assessee to tax,” the Tribunal said.To Read the full text of the Order CLICK HERE