INCOME TAX ACT, 1961

Section 154

Rectification under section 154 - Intimation under section 143(1) on basis of which order under section 154 was passed by ACTT - Validity -

In was the case of assessee that assessee had inadvertently included exempted income amounting to Rs. 3,23,600 in return of income. Assessee had received the tax demand of Rs. 1,57,780 under section 143 (1). As the letter was sent to old address of assessee, it failed to rectify the return of income filed by including the exempted income in the total income within a period of time. Thereafter assessee filed revised return of income by excluding the exempted income and filed an application under section 154. AO rejected the application filed by assessee on the fact that kind of mistake does not come within the purview of section 154. Held: Purpose of tax administration is to collect just and fair tax from the citizen and should not be an endeavor of revenue authority to take benefit of ignorance of the citizen. Assessee had wrongly included exempted income in the total income as a result thereof there was an increasing taxability of assessee which resulted in issuing tax demand by revenue authorities. In the interest of justice, matter was remanded back to CIT(A) for a fresh adjudication on merit whether assessee had wrongly included exempted income in the total income or not.

REFERRED :

FAVOUR : In assessee's favour by way of remand

A.Y. :

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