ITAT deletes Addition which were based on mere Typographical Error in Form 3CD

Palanisamy Senthilkumar Vs ITO (ITAT Chennai)

In the case of Palanisamy Senthilkumar Vs ITO, the dispute revolved around an addition to the assessee’s income based on alleged unexplained expenditure related to payments made to contractors. The issue arose during the assessment year 2018-19, and the matter was brought before the Commissioner of Income Tax (Appeals) after the assessment was framed by the Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income-tax Officer, National e-Assessment Centre, Delhi.

The primary contention of the appellant was the imposition of an addition of Rs. 2,42,58,153/- by the Assessing Officer, which was subsequently reduced by the Commissioner of Income Tax (Appeals) to Rs. 79,99,559/-. This reduction was based on the observation that a portion of the expenditure was supported by evidence, thus warranting a lower addition.

However, the appellant argued that the entire addition was unwarranted due to a typographical error in Form 3CD, a document submitted as part of the audit report. The error incorrectly inflated the amount of commission and brokerage expenses, leading to the imposition of the additional tax liability.

The appellant provided a certificate from a Chartered Accountant confirming the typographical error and clarifying the correct amount of commission and brokerage expenses incurred. This certificate was supported by various financial documents and filings submitted by the appellant.