Deepak Kumar Vs CPC (ITAT Kolkata)
One Mistake in 3CD = ₹41 Lakh Tax? ITAT Says: “Not So Fast… Hear the Assessee First!”- A clerical mistake in Form 3CD cannot lead to addition without hearing the assessee– substance prevails over form, & justice requires a fresh examination on merits
Assessee was a civil contractor operating under the proprietorship of Shivshakti Constructions & had filed his return of income at ₹9.59 lakh for A.Y. 2017-18. However, the CPC, Bengaluru processed the return u/s 143(1) & made huge adjustments based solely on the figures reported in Form 3CD, increasing the total income to ₹51.16 lakh & raising a tax demand of ₹17.18 lakh.
The assessee explained that the original Form 3CD was incorrectly filled by the Chartered Accountant, & due to inadvertent human error, incorrect disallowances & figures were reported. The auditor himself admitted the mistake & a revised Form 3CD was later filed, but by that time, CPC had already made the adjustment. A rectification application u/s 154 was filed, but CPC rejected it, stating that the adjustment was based on the original audit report on record.
Assessee went before the CIT(A) & argued that the revised audit report should be accepted, that CPC exceeded the scope of section 143(1), & that no proper opportunity of being heard was given. However, the CIT(A) dismissed the appeal, holding that CPC acted within its powers & that the revised Form 3CD was inadmissible as it was filed later. The merits of the disallowance u/s 40(a)(ia) were not examined at all.
Before the ITAT, Assessee again stressed that the error in Form 3CD was genuine, acknowledged by the auditor, & that substantive justice cannot be denied due to a technical mistake. Assessee specifically requested that the matter be remanded back so that the correct Form 3CD & supporting documents could be considered. Significantly, the Departmental Representative did not object to remand, acknowledging that the merits of the claim were never adjudicated.
