Annapurna Dibbur Girish Vs ACIT (ITAT Bangalore)
The ITAT Bangalore held that claiming deduction under the wrong section (Section 54 instead of 54F) is not fatal, and restored the matter for fresh examination, while also knocking down the penalty.
The assessee had sold properties and claimed deduction of ₹2.03 crore under Section 54, which the AO denied on the ground that the correct provision was Section 54F, resulting in addition to income.
Although the CIT(A) dismissed the appeal as time-barred (delay of 1226 days), the Tribunal took a lenient view in the interest of natural justice, noting that substantial demand was involved and the assessee deserved one more opportunity.
Importantly, the Tribunal observed that mere quoting of a wrong section does not defeat a legitimate claim, if otherwise eligible under law. It therefore remanded the matter back to the AO for de novo assessment to examine eligibility under the correct provision.
Consequently, since the quantum issue itself was restored, the penalty u/s 270A automatically failed and was set aside.
The appeal was thus allowed for statistical purposes, reinforcing that substance prevails over technical errors.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
These appeals are filed by the assessee against the order of CIT(A) (NFAC, Delhi), vide DIN and Order No. ITBA/NFAC/S/250/2025-26/1080264951(1) dated 02.09.2025 for Assessment Year 2017-18, arising out of the order passed under section 143(3) of the Act on 26.11.2019 and vide DIN and Order No.ITBA/NFAC/S/250/2025-26/1081514736(1) dated 07.10.2025 arising out of the penalty order passed under section 270A of the Act on 05. 01.2022 respectively.
