INCOME TAX ACT, 1961

Section 143(3)

Assessment - Prima facie adjustment - Dividend income being exempt - Not mentioned in schedule EI but shown as exempt under the schedule BP

Assessee filed its return of income and the same was processed under section 143(1). In the computation of income, assessee had claimed dividend income as exempt. However, assessee omitted to fill the details of exempt income in 'Schedule-EI' in the Statutory return form prescribed for filing returns. It was pertinent to note that assessee had mentioned that the dividend income was exempt in 'Schedule BP' relating to computation of 'Income from business or profession'. Hence, CPC did not grant exemption claimed by assessee. First Appellate Authority observed that assessee had omitted to mention the details of exempt income in Schedule EI. He also observed that the assessee did not file revised return of income, even though the discrepancy was informed by CPC to the assessee. Held: Assessee, out of ignorance or inadvertence has omitted to mention the details of exempt income in the relevant 'Schedule EI'. So, the ignorance of assessee or inadvertent mistake committed by the assessee should not come in his way in claiming exemption, which is otherwise allowable under the Act. It was also not a case that assessee did not respond to the notice issued by CPC. Assessee had duly responded to the same, but it was the submission of revenue that assessee should have filed a revised return of income. There is no dispute with regard to the fact that assessee was entitled for exemption of dividend income. The object of assessment was to determine correct total income of the assessee. Accordingly, right of assessee could not be denied merely on accounting of technical errors. Hence, there was a mistake apparent from record in not granting exemption claimed by assessee.

Relied:Suman Chandra G. Mehta v. ITO [ITA No.564/Mum/2012 dated 24-1-2015] and Asstt. CIT v. Rupam Impex (2016) 66 Taxman.com 181 (Rkt-Trib)(Mag) : 2016 TaxPub(DT) 1098 (Rkt-Trib)