ITAT Mumbai Allows Rectification of Double STCG Addition & 80C Disallowance After Condoning Delay

Background of the Dispute

The matter in Sarita Vijaykumar Gupta Vs ITO (ITAT Mumbai) arose from an assessment for A.Y. 2014-15 where the assessee challenged:

  • An error in computation of income, where Short-Term Capital Gain (STCG) was allegedly added twice, and
  • Disallowance of deduction under Section 80C of the Income Tax Act 1961 despite submission of supporting documentation.

The appeal before the Tribunal stemmed from an order passed by the CIT(A) / NFAC dated 26.08.2025, where the first appellate authority had rejected the appeal in limine solely on account of delay of 332 days in filing, without analyzing the substantive issues involved.

The assessee approached the ITAT Mumbai seeking both:

  1. Condonation of delay in filing the appeal before CIT(A), and
  2. Rectification of the alleged clerical/arithmetical error relating to double addition of STCG and verification of Section 80C deduction.

Grounds Raised Before the Tribunal

The assessee’s appeal before the Tribunal contained, in essence, the following contentions:

  • The Assessing Officer (AO), while finalizing the assessment, mistakenly counted the STCG twice, leading to an artificially inflated total income and consequentially an excessive tax demand.
  • The deduction claimed under Section 80C of Chapter VI-A was wrongly denied, even though the assessee had, during assessment proceedings, furnished all requisite proof and documentation to justify the claim.
  • The computation sheet appended to the demand notice actually showed the correct gross total income, but at the stage of computing total income, the AO inadvertently repeated the STCG figure, creating an error that is purely clerical and arithmetical in nature, and therefore apparent from record.
  • The assessee requested that the Tribunal direct rectification of this computational mistake and permit the Section 80C deduction in accordance with law, thereby restoring the income figure that both sides had effectively agreed upon at assessment stage.

Chronology of Assessment and Appeal

Assessment Proceedings

  • The assessment for A.Y. 2014-15 was reopened under Section 147.
  • The reassessment order was passed on 29.05.2023.
  • In that order, according to the assessee:
    • STCG was taken into account twice, and
    • Deduction under Chapter VI-A, especially Section 80C, was not allowed.

Appeal Before CIT(A)

  • The assessee filed an appeal before the CIT(A) on 24.04.2024.
  • This resulted in a delay of 332 days from the date of the reassessment order.
  • In Form No. 35, the assessee set out the reasons for the delay, asserting that:
    • The delay was due to circumstances beyond her control,
    • There was no intention to abandon or delay her legal remedies, and
    • She was actively seeking advice regarding whether to move a rectification application under Section 154 or file a regular appeal.

Despite these explanations, the CIT(A):

  • Declined to condone the delay, and
  • Dismissed the appeal without entering into merits, thereby denying the assessee an adjudication on the substantive issues of double STCG addition and Section 80C disallowance.

Submissions Before the ITAT

Assessee’s Contentions

The learned authorised representative (ld.