By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Bhadresh Doshi Chartered Accountants
fiogf49gjkf0d
Section 143(1), 154 – Keeping in mind the present system of e-filing, application u/s. 154 is maintainable in a case where assessee has not shown Short Term Capital Gain u/s. 111A in Schedule CG of e-return.
Facts:
For assessment year 2008-09, the assessee e-filed return which was revised by filing another e-return on 05.01.2009.
During the said year the assessee had short term capital gain of Rs. 2,65,853 which was chargeable at special rates u/s. 111A. In the returns, the assessee had at Item No. 3(a)(i) inadvertently/due to clerical error mentioned the amount as Nil but at the same time in item no. 3(a)(ii) and 3(a)(iii) short term capital gain of Rs. 2,65,853 was shown. Also in Schedule CG–Capital Gains on page 19 of e-return shown short term capital gain at item no. 6 but due to inadvertence/clerical error at item No. 7 – Short Term Capital Gain u/s. 111A included in 6 above the amount was stated to be Nil.
In the intimation received by the assessee, short term capital gain was charged to tax at normal rates instead of rate mentioned u/s. 111A. The assessee’s application u/s. 154 to rectify this was rejected on the ground that the assessee ought to have rectified the mistake in the returns by filing a revised return and this mistake is not rectifiable u/s. 154 of the Act.
Aggrieved, the assessee preferred an appeal to the CIT(A) who upheld the action of the Assessing Officer (AO).
Aggrieved, the assessee preferred an appeal to the Tribunal.
Held:
The Tribunal noted that in the present system of e–filing of return which is totally dependent upon usage of software, it is possible that some clerical errors may occur at the time of entering the data in the electronic form. The return is prepared electronically which is converted into an XML file either through the free downloaded software provided by CBDT or by the software available in the market. In either of the case, there is every possibility of entering incorrect data without the expert knowledge of preparing an XML file. The Tribunal also noted that the assessee had under Schedule SI – income chargeable to income-tax at special rate IB which is at internal page 24 of the return shown short term capital gains at Rs 2,65,853 and tax thereon @ 10% to be Rs 26,585. The Tribunal directed the AO to rectify intimation u/s. 143(1) and to charge tax on short term capital gains @ 10%.
The appeal filed by the assessee was allowed.
