Case Law Details
Uttam Narayanmal Mehta S K Metal Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai addressed an appeal filed by Uttam Narayanmal Mehta S K Metal against the order of the Ld. Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre, Delhi, concerning Assessment Year 2018-19. The appeal centered on a mistake in the Income Tax Return (ITR) filing, leading to double taxation of profit.
The appellant declared income of Rs. 30,53,550/- in the ITR for A.Y 2018-19. However, the CPC enhanced the income to Rs. 62,78,450/-, making an addition of Rs. 32,24,903/- under the head “PGBP” (Business income). Subsequently, the appellant filed a rectification application, which was rejected by the CPC. The appellant then filed another rectification application before the AO, emphasizing a bona fide mistake in the ITR filing.
The mistake stemmed from the erroneous filing of Rs. 64,39,728/- as net profit from the profit & loss account, whereas the correct amount was Rs. 32,18,247/-. The appellant explained that the incorrect figure included profit from a proprietary concern, resulting in double taxation. Despite the appellant’s submission of documentary evidence, the AO rejected the rectification application.
The ITAT observed that the AO failed to examine the appellant’s plea in the light of the Tax Audit Report (TAR) filed in form 3CD, which reflected the correct profit amount. Emphasizing the importance of substantive justice over technicalities, the ITAT directed the AO to re-examine the plea and verify the facts. The appellant was instructed to provide relevant documents, and the AO was tasked with passing an order in accordance with the law.
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