Bombay High Court: Section 264 Revision Valid for Correcting Inadvertent ITR Errors Despite Availability of Appeal
The Bombay High Court has delivered a significant judgment regarding the scope of revisional jurisdiction under the Income Tax Act 1961. In the matter of Swaminarayan Mandir Trust Vs CIT (Exemptions), the Court ruled that the Commissioner of Income Tax is empowered under Section 264 to grant relief for bona fide errors committed by an assessee in their Income Tax Return (ITR), even if the assessee did not file a revised return or opt for the appellate route under Section 246A.
This ruling reinforces the principle that technical or clerical errors should not preclude an assessee from claiming substantive tax benefits, such as charitable exemptions under Section 11.
Factual Background
The petitioner, Swaminarayan Mandir Trust, is a charitable entity registered under Section 12A of the Income Tax Act 1961. For the Assessment Year 2018–19, the assessee filed its return declaring a total income of Rs. 16.46 lakhs.
During the filing process, the assessee committed inadvertent data entry errors. Specifically, receipts were disclosed in incorrect schedules within the ITR form. Despite these input errors, the return acknowledgment generated by the system reflected the correct tax liability and refund due, leading the assessee to believe the filing was accurate.
However, the Centralized Processing Centre (CPC) processed the return under Section 143(1), resulting in the denial of the exemption under Section 11 and raising a tax demand of Rs. 1,94,144 due to the mismatched schedule entries.