Clipped from: https://taxguru.in/income-tax/wrong-itr-column-cant-deny-trust-exemption-itat-kolkata.html
Ramakrishna Prema Bihar Vs ITO (Exep) (ITAT Kolkata)
Wrong Column in ITR Can’t Deny Trust Exemption: Kolkata ITAT Condones 2315-Day Delay & Restores Matter- Substance Over Return-Utility Mistake: ITAT Revives Trust’s Claim of Application of Income
Kolkata ITAT ‘D’ Bench in Sree Ramakrishna Prema Bihar vs ITO (Exemption), Ward-1(3), Kolkata (ITA Nos.1985 & 1986/Kol/2025, AYs 2015-16 & 2020-21, order dated 23-12-2025) condoned an extraordinary delay of 2315 days, set aside the ex-parte appellate orders, and restored the matter to the Jurisdictional AO for fresh adjudication on merits, holding that a bona fide clerical error in the ITR cannot defeat a trust’s substantive exemption claim
The assessee, a charitable trust registered u/s 12A, had claimed application of income but inadvertently reported the same in a wrong column while filing the return online. Owing to this technical mistake, CPC disallowed the claim, resulting in additions. Appeals before CIT(A) were dismissed ex-parte due to non-condonation of delay of 2315 days.
Before ITAT, the assessee explained that the delay and the disallowance stemmed from a return-utility reporting error, not from absence of actual application of funds. ITAT found the explanation bona fide, observed that the assessee is a registered charitable trust, and held that ends of justice require condonation of delay and adjudication on merits.
The Tribunal categorically observed that if the trust has actually incurred application of income during the year, mere wrong punching of figures in the ITR cannot deny exemption. Accordingly, ITAT condoned the delay, set aside the orders of CIT(A), and restored the issue to the file of the JAO with a direction to verify the application of income afresh after granting reasonable opportunity of hearing.
The appeals were allowed for statistical purposes.
Key takeaway:
For charitable trusts, substantive compliance prevails over technical ITR-utility mistakes. Wrong column reporting is curable, and huge delays can be condoned where denial of exemption flows from a bona fide clerical error rather than lack of application of income.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The present appeals filed by the assessee arise from order dated 16.06.2025passed u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) by the Ld. Additional/Joint Commissioner of Income Tax (Appeals), [hereafter “the Ld. CIT(A)].
2. At the outset, the Ld. Counsel for the assessee pointed out that the Ld. CIT(A) has decided both the appeals exparte by not condoning the delay in filing the appeal of 2315 days. After perusing the facts in the appellate order and hearing the rival contentions, we hereby condone the delay in filing the appeal before CIT(A). We observe that the assessee is a trust duly registered u/s 12A of the Act and has claimed deduction from gross income qua the application of funds which inadvertently shown in the wrong column while punching the return of income online. Consequently, the AO-CPC disallowed the claim of the assessee and added the same to the income of the assessee. In our opinion, the ends of justice would be well served if the issue is restored to the file of JAO with the direction to decide the same on merit afresh. Needless to say, that if the assessee has actually incurred application of funds/income during the year and the mistake is only while preparing the return of income online as regards application of funds in the wrong column then this has to be considered of application of funds by the trust and deduction has to be allowed to the assessee. With these observations, we restore these appeals to the file of JAO with a direction to decide the same after affording a reasonable opportunity of being heard to the assessee,
3. In result, appeals of the assessee are allowed for statistical purposes.
Order pronounced on 23.12.2025
aniltikotekar4sme.com 