It is common to make clerical mistakes when you are e-filing your IT returns. Reasons may be you are totally new to the process or you dont know the way of creating XML file which need to be uploaded to the IT website. Recent ruling clarify that you can rectify such type of errors under Sec.154.
In this case, the assessee filed e-return which was revised by filing another e-return on 5.1.2009. The assessee received intimation u/s. 143(1) of the Act and found that the income assessed and the rate of tax is different from the income returned and the taxes paid by him. The assessee immediately moved an application u/s. 154 of the Act before the AO. It was again pointed out that the tax has been calculated at normal rate on entire income ignoring the fact that the assessee has shown Short term Capital gain which should have been taxed at special rate as applicable on Short Term Capital gain.
The AO rejected the application u/s. 154 of the Act holding that the assessee has not shown Short Term Capital Gain u/s. 111A at S. No. A7 of Schedule CG appearing on page 19 of the e-return. The AO further observed that the same mistake has been occurred in the original as well as in the revised return of income filed by the assessee. According to the AO, the proper remedy was by filing a revised return of income instead of moving an application u/s. 154 of the Act. The AO accordingly rejected the application u/s. 154 of the Act. But it actually happened such that, during revised filing STCG was shown but due to clerical error it was missed in amount column.
For the above reason during the judgement tribunal found these points and ordered as can be rectified u/s 154.
1) In the present system of e-filing of return which is totally depended upon the usage of software, It is possible that some clerical errors may occur at the time of entering the data in the electronic form.
2) The return is prepared electronically which is converted into an XML file either through the free down loaded software provided by the CBDT or by the softwares available in the market. In either of the case, there is every possibility of entering incorrect data without having the expert knowledge of preparing an XML file.
3) XML file so created is uploaded to the official website. Once the return is uploaded ITR-V , which is the acknowledgement of the return so filed , is generated by the system itself and if , the return is not signed digitally, then ITR-V so generated has to be signed and sent to CentralProcessing Centre, Bangluru within 120 days.
4) Keeping in mind this system of e-filing of the returns, it is clear that assessee had claimed STCG and had shown it in e-return but the same figure did not appear under the item where the STCG is to be taxed at special rate under Section 111A of the Act.
5) However, under ‘Schedule SI-income chargeable to income tax at special rates’, the assessee had shown 10% tax on STCG, which clearly establishes that the assessee had shown STCG liable to be taxed at special rate of 10%.
6) Accordingly, reversing the finding of the Ld. CIT(A), we direct the AO to allow credit of the Short Term Capital gains subject to special rate of tax as per provisions of Sec. 111A of the Act and rectify the intimation u/s. 143(1) accordingly.
Hope this may give some relief to a lot.