Sarita Vijaykumar Gupta Vs ITO (ITAT Mumbai)
Clerical Error Can’t Inflate Tax-ITAT Orders Rectification of Double STCG Addition
The case involved a clear computational error where the AO had double-counted Short-Term Capital Gains (STCG), resulting in inflated income and demand. Additionally, deduction u/s 80C was denied despite supporting documents.
The CIT(A) dismissed the appeal in limine due to delay (332 days) without examining merits.
The ITAT held:
- Delay was bona fide and not intentional, hence condoned
- CIT(A) erred in not admitting the appeal despite reasonable cause
On merits:
- The issue of double addition of STCG is a clerical/arithmetical error
- Such mistakes are rectifiable u/s 154
- Claim of 80C deduction also requires verification
Accordingly, the ITAT:
- Restored the matter to the AO
- Directed verification of:
- Double taxation of STCG, and
- Eligibility of deduction u/s 80C
- Ordered AO to grant relief as per law after giving opportunity
The appeal was allowed for statistical purposes, reinforcing that:
- Technical delays should not defeat substantive justice, and
- Obvious computational errors must be corrected rather than sustained.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. This appeal by assessee is directed against the order of Ld. CIT(A) / NFAC dated 26.08.2025 for A.Y. 2014-15. The assessee has raised following grounds of appeal:-
i. That on the facts and in the circumstances of the case and in law, the learned AO has erred in computing the total income of the appellant by erroneously considering the amount of Short-Term Capital Gain (STCG) twice, thereby inflating the taxable income and consequently raising an incorrect demand.
ii. That the learned Assessing Officer further erred in disallowing the deduction claimed under section 80C of Chapter VI-A of the Income Tax Act, 1961, despite the appellant being fully eligible for the same and having furnished all necessary documents and evidence in support of the claim during the course of assessment proceedings.
iii. That the computation sheet attached to the demand notice reflects the correct amount of gross total income as per the assessed computation; however, while calculating total income, the Assessing Officer has inadvertently double-counted the STCG, resulting in an arithmetical and clerical error apparent on record.
iv. That the appellant prays that the Hon’ble Tribunal may kindly direct rectification of the computational error and allow the deduction under section 80C of Chapter VI-A as per law, thereby restoring the correct assessed income as per the computation agreed upon during assessment.
2. Rival submissions of both parties have been heard and perused the record carefully. The learned authorised representative (ld. AR) of the assessee submits that the case of assessee for AY 2014-15 was reopened under Section 147. Assessment was completed on 29.05.2023. The assessing officer (AO) erroneously considered the amount of Short Terms Capital Gain (STCG) twice. Thereby, increased the taxable income consequently raised the demand. The AO also not allowed deduction of Chapter VIA. The assessment was completed on 29.05.2023. The assessee filed appeal before Ld. CIT(A) on 24.04.2024. There was delay of 332 days in filling appeal. The assessee in Form-35 explained the cause of delay. The assessee reasonably explained the delay. The ld. CIT(A) did not condone the delay and the appeal was dismissed in limine. The delay in filing appeal was not intentional or deliberate rather due to the reasons beyond his control. The substantial rights of assessee are involved. The assessee has no case on merit if her case is considered on merit. The Ld. AR submits that delay may be condoned and matter may be restored to file of AO to rectify the mistake. After passing assessment, the assessee was also advised to file application for rectification or may file appeal before CIT(A). The assessee was collecting supporting evidence, the consultant instead of filing application for rectification filed appeal before ld. CIT(A). The delay occurred in taking recourse of law, otherwise, the intention of assessee was bona fide. The assessee is really interested in pursuing her case on merit.
