Are you a taxpayer who mistakenly declared a much higher income on your income tax return? Did the assessing officer process your income tax return under section 143(1) and raise a tax demand that you’re struggling to pay? You’re not alone. But don’t worry, there’s hope. A recent case, Smt. Chandrikaben Thakarshibhai Langhnoja v. ITO, has set a precedent that could help you rectify your mistake and get your tax demand reduced.
In this case, the assessee (that’s you, the taxpayer) mistakenly declared an income of Rs. 54,97,370 from salary on their income tax return, instead of the correct amount of Rs. 4,97,370. The assessing officer processed the return and raised a tax demand based on the incorrect figure. The assessee then filed a revised income tax return to correct the typographical error, but this return was declared invalid.
Undeterred, the assessee filed a rectification application under section 154 of the Income Tax Act, 1961, stating that the mistake was a typographical error and producing Form No. 16 to support their claim that their total income was only Rs. 4,97,370. However, the lower authorities rejected the application on the grounds that the assessee had not filed the revised return within the time limit.
The case went to the Income Tax Appellate Tribunal (ITAT) in Rajkot, which found that the assessee had not made any new claim or deduction that would require them to file a revised return. The only issue was the typographical error, which was a clear case of a mistake apparent on record. The ITAT ruled that this mistake was well within the scope of section 154, which allows for the rectification of mistakes on record, and that the lower authorities had erred in rejecting the application.
The ITAT directed the assessing officer to delete the addition made in the hands of the assessee and reduce the tax demand accordingly. This ruling is good news for taxpayers who make typographical errors on their income tax return and are struggling to rectify them within the time limit for filing revised returns.
So, what can you take away from this case? If you’ve made a typographical error on your e-return and the assessing officer has raised a tax demand based on that error, don’t give up hope. You may be able to rectify the mistake under section 154, even if you’ve missed the deadline for filing a revised return. As long as the mistake is a clear case of a mistake apparent on record and you can provide evidence to support your claim, you may be able to get the tax demand reduced.
However, it’s important to note that this ruling applies only to cases where the mistake is a typographical error and there are no new claims or deductions involved. If you’ve made a substantive error on your income tax return, such as failing to report income from a new source or claiming an excessive deduction, you may need to file a revised return within the time limit to rectify the error.
In summary, the Smt. Chandrikaben Thakarshibhai Langhnoja v. ITO case is a welcome development for taxpayers who have made typographical errors on their e-returns. If you find yourself in this situation, don’t hesitate to file a rectification application under section 154 and provide evidence to support your claim. With the right approach, you may be able to get your tax demand reduced and avoid unnecessary financial strain.
Chandrikaben Thakarshibhai Langhnoja v. ITO (2023) 146 taxmann.com 515 (ITAT Rajkot)
