REVISION OF RETURN DUE TO CLERICAL MISTAKE

This query is : Resolved

PRADEEP PAL (Querist)
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17 December 2009
Mr. A DEALS IN TAX FREE GOODS

WHILE FILLING ONLINE RETURN HE WRONGLY WRITES THE TAX FREE SALES IN THE COLOUMN OF TAXABLE SALE @ 12.5 %

THE MISTAKE WAS NOTED AND CORRECTION MADE BY REVISED RETURN FILED ONLINE WITH IN FIVE MINUTES.THE TAX COMES TO NIL IN THE REVISED RETURN BUT NO OBJECTION WAS FILED TREATING THE MISTAKE AS CLERICAL MISTAKE.

DURING THE AUDIT COURSE DEPARTMENT RAISED
DEMAND : -
FOR TAX ,INTEREST & PENALTY

AS NO OBJECTION WAS FILED FOR REVISE RETURN. WHETHER THE DEMAND CAN BE CANCELLED BY THE OBJECTION HEARING AUTHORITY IN THE OBJECTION AGAINST THE ORDER OF ASSESSMENT BY DEPARTMENT.

Vishnu Saboo

Vishnu Saboo (Expert)
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18 December 2009 you have to state it with proper evidence that it was just clerical mistake.

PRADEEP PAL

PRADEEP PAL (Querist)
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19 December 2009 WE HAVE PRODUCED ORIGNAL BILL TO APPELETE AUTHORITY

AND

ASSESSMENT ORDER IT SELF STATES THAT " TAX FREE SALES IS WRONGLY ENTERED INTO THE COLOUMN OF TAX @ 12.5%" BUT NOT ABLE TO REMOVE DEMAND AS NO OBJECTION WAS FILED WITH IN TIME REGARDING THE REVISION OF RETURN

APPELATE AUTHORITY HAVING ITS VIEW THAT "
IT IS A MISTAKE OF TECHNICAL TYPE AND COULD NOT BE RECTIFIED AT THIS STAGE"

PLEASE SUGGEST SOME WAY TO DELETE THE DEMAND AS DEALER IS NOT LIABLE IN ANY WAY

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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22 July 2025 Here’s a detailed response and practical suggestions based on the situation you described about revision of return due to a clerical mistake and the ensuing demand from the tax department:

Situation Summary:
Mr. A mistakenly included tax-free sales as taxable sales at 12.5% in the original return.
He immediately filed a revised return correcting this mistake (within 5 minutes).
No formal objection (or appeal) was filed against the assessment order.
Despite that, the department raised a demand for tax, interest, and penalty.
The assessment order itself acknowledges the mistake but refuses to cancel the demand as no objection was filed timely.
The appellate authority considers this a “technical mistake” not rectifiable at this stage.
Legal & Practical Considerations:
Nature of the Mistake:
This is a purely clerical or technical mistake and not a substantive issue of evasion or misreporting.
The department’s own assessment order states the mistake clearly.
Revision of Return and Objections:
The revised return filed immediately should have corrected the mistake.
However, since no formal objection or appeal was filed within the stipulated time, the department treats the matter as final.
Legal Remedies Available:
a) Filing a Late Objection/Appeal:

You may apply for condonation of delay in filing the objection or appeal, explaining the genuine clerical nature of the mistake and the immediate correction by revised return.
Courts and authorities often condone delay for genuine cases and minor clerical errors.
b) Filing a Rectification Application under Section 154 (if applicable):

If the demand arises from an apparent mistake in the order, a rectification petition may be filed requesting correction without going to appeal.
However, the department may reject this if it views it as a substantive issue.
c) Representations and Personal Hearing:

Request for a personal hearing before the objection hearing authority or higher appellate authority, highlighting:
The nature of the mistake
Immediate correction by revised return
The absence of any intention to evade tax
Relevant invoices/bills as evidence
d) Approach the Commissioner (Appeals):

If the lower appellate authority is rejecting the case, approach the Commissioner of Income Tax (Appeals) with all evidence.
Courts generally take a liberal view for clerical errors corrected early.
Penalty and Interest:
Penalty is usually leviable for wilful concealment or misreporting, which is not the case here.
Interest on delayed payment may apply if tax was actually due, but here tax is nil after correction.
Suggested Next Steps:
File an appeal or rectification application immediately, if time permits, with the following key points:
Attach copies of original and revised returns.
Attach supporting evidence (invoices showing tax-free sales).
Explain that this was a bona fide clerical mistake corrected immediately.
Request waiver or cancellation of demand, penalty, and interest.
If the objection period is over, apply for condonation of delay citing the genuine mistake.
If appeals fail, consider alternative dispute resolution or consult a tax expert for possible writ petition on grounds of natural justice.
Sample Argument Points to Use:
The error was an honest clerical mistake with no intent to evade tax.
The revised return was filed immediately correcting the mistake.
The department’s own order accepts the nature of the mistake.
No tax was actually due after correction; hence, demand for tax and penalty is unjust.
The taxpayer has acted in good faith and penalties should not apply under such circumstances.

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