AO to Provide Window for Correcting Updated ITR | ITAT

Case Details: Nararshabh Sharma v.Assessing Officer, Ward-7(3), Pune - [2025] 178 taxmann.com 349 (Pune - Trib.)

Judiciary and Counsel Details

• Manish Borad, Accountant Member
• Rajkumar Doshi, CA for the Appellant
• Deepak Kumar Kedia, JCIT for the Respondent

Facts of the Case

The assessee was an individual carrying on the business of advertising and servicing contracts. The tax consultant filed the return of income for the relevant assessment year. The tax consultant incorrectly reported the amount of business income and TDS in the return of income. The assessee filed a revised computation of income but was unable to revise the return of income. The assessee filed an application under section 154 to rectify the mistake. However, it did not get any relief.

The matter reached the Pune Tribunal.

High Court Held

The Tribunal held that, despite the assessee knowing that incorrect income and incorrect claim of TDS were filed in the return by the tax consultant, there was no mechanism for revising it. Due to the provisions of the Income-tax Act, which do not provide any mechanism to revise the return after a particular time period, this situation had arisen.

The department cannot treat the return as invalid because it has been filed validly by the assessee, and a wrong claim of TDS was made in the return. On the other hand, the assessee was facing hardship due to the mistake, advertently or inadvertently, committed by the tax consultant.

At this juncture, the Tribunal took note of Article 265 of the Constitution of India, which states that no tax shall be levied or collected except by the authority of law. This fundamental principle ensures that taxes can only be imposed and collected if a specific law has been enacted by the appropriate legislative authority, allowing such actions.

The article sees that taxation is not arbitrary and is backed by legislation passed by either Parliament or state legislatures, depending on the subject matter. The article serves as a check against unauthorised taxation, reinforcing the principle that all fiscal impositions must have a legal basis.
In the instant case, the contentions of the assessee were correct, and the assessee was heavily burdened for the extra tax liability on the income not earned by him. Merely because there was no mechanism to revise such a return, the assessee should not be penalised.

Under these given facts and circumstances, the matter needs to be restored to the learned Jurisdictional Assessing Officer (JAO), who shall either provide a window to the assessee to file the correct return of income or, in the alternative, provide the opportunity to the assessee to file the correct computation of income along with relevant details and documents. The JAO shall examine these details, carry out the necessary investigation, and then assess the correct income of the assessee.