Difference in the interest income declared in the original return and the revised return

This case involves a taxpayer who filed an original tax return with a higher declared income, including a substantial amount of interest income. They later filed a revised return, significantly reducing the declared income by correcting an error related to this interest. Although the original return was filed late, the tribunal ruled that the Assessing Officer (AO) must consider the revised return as notification of a mistake. The AO verified the correction and found it accurate, leading to the dismissal of the Revenue's appeal.

IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD ‘A’ BENCH : Hyderabad
(Through Video Conference)
 

Before Smt. P. Madhavi Devi, Judicial Member
And
Shri A. Mohan Alankamony, Accountant Member
ITA No. 192/Hyd./2018
Assessment Year: 2014-15

Dy.CIT, Circle 1(2)

Hyderabad

vs.

Sri Krishnaiah Bollineni

Hyderabad
PAN: ACVPB8494N

Cross Objection No. 22/Hyd/2018
(In ITA No. 192/Hyd./2018)
Assessment Year: 2014-15

Shri Krishnaiah Bollineni

Hyderabad
[PAN: ACVPB8494N]

Appellant

vs

Dy.CIT, Circle 1(2)
Hyderabad

Respondent

For Revenue: Smt. Anjala Sahu, DR
For Assessee: Sri D.V. Ajaneyulu AR
 

Date of Hearing : 12/07/2021
Date of Pronouncement : 26/07/2021
 

O R D E R

This appeal is filed by Revenue while the Cross Objection is filed by the assessee, against the order of CIT(A)-1, Hyderabad dated 26.10.2017 relating to A.Y. 2014-15.

2. Brief facts of the case are that assessee an individual, deriving income from salary and other sources, e-filed his return of income for the AY 2014-15 on 01.11.2014 admitting total income of Rs. 9,49,48,520/- and filed his revised return of income for AY 2014-15 on 28.10.2015 admitting total income of Rs. 1,47,15,080/-. During the assessment proceedings u/s 143(3) of the Act, the assessment was completed by accepting income returned by assessee in original return of income i.e. Rs. 9,49,48,520/-.

3. Aggrieved by non-consideration of the revised return of income, the assessee filed an Application u/s 154 of the Act requesting the AO to consider the revised return of income in which the assessee has admitted total income at Rs. 1,47,15,080/-. But the AO did not dispose of the same. Meanwhile, the assessee filed an appeal before the CIT(A) stating that in the original return of income, the assessee had mistakenly included a sum of Rs. 8,02,33,438/- being interest receivable in total amount of Rs. 22,67,68,332/- and the same was corrected in the revised return of income. It was submitted that the AO should have considered the revised return of income filed by the assessee. The CIT(A) directed the AO to verify as to why there is difference in the interest income offered in the original return and the revised return and to rectify the same as per law.

4. Against this order of CIT(A), the Revenue is in appeal before us by raising the following grounds of appeal.

Having heard both the parties and having regard to the rival contentions and the material placed on record, we find that for the assessee before us, the due date for filing the original return of income was 31.07.2014 while it was filed by the assessee on 01.11.2014 and the revised return of income was filed on 28.10.2015. It is the case of the Revenue that the original return is filed belatedly and therefore assessee’s revised return is not valid. Though this contention of the revenue is correct, we find that even if the revised return cannot be considered, the assessee can always bring to the notice of the AO,any mistake in the return of income, and the AO is bound to consider the same and compute the income accordingly. The revised return of income filed by the assessee can be considered as information filed by the assessee about the mistake in the return of income. The CBDT vide Circular no. 14(XL-35) of 1955, dated 11th April, 1955, had clearly issued instructions that the AO should not take advantage of the ignorance of the assessee to collect more tax from him than is legitimately due from him. In this case, we find that in the consequential order dated 03.05.2018 passed by the AO, the claim of the assessee was verified and was found to be correct. Therefore, we see no reason to interfere with the order of the CIT(A) .

6. In the result, both the appeal of the Revenue as well as the Cross Objection of the assessee are dismissed.

Order pronounced in Open Court on 26/07/2021

Please find attached the enclosed file for the full judgement