Ms. Bharati Singh vs Assistant Commissioner Of Income Tax

PER MAHAVIR SINGH, VP:

These two appeals by the assessee are arising out of separate orders of learned Addl./JCIT(A)-2, Pune dated 6^th February, 2026 and 2^nd February, 2026 for the assessment year 2008-09 and 2009-10 respectively.

In this case, the return of income was processed by the Assessing Officer, CPC, Bangalore under Section 143(1) of the Income-Tax Act, 1961 (hereinafter referred to as 'the Act') and qua that, assessee filed rectification which was rejected under Section 154 of the Act dated 22^nd July, 2025.

The issues in assessment year 2008-09 and 2009-10 are common and hence, we will take up first ITA No.2798/Del/2026. The only issue in this appeal of the assessee is as regards the order of learned CIT(A) confirming the action of the Assessing Officer rejecting application under Section 154 of the Act dated 22^nd July, 2025 holding that inclusion of exempt income in the return of income under the head income from other sources of ₹5,05,407/- is not a mistake apparent on record in terms of the decision of Hon'ble Supreme Court in the case of Goetz (India) Ltd. Vs. CIT – (2006) 284 ITR 323 (SC).

The assessee is an individual whose taxable income arises mainly from income from house property and income from other sources such as interest income and dividend income. The assessee filed her return of income for the assessment year 2008-09 under Section 139(1) of the Act, in which the assessee included income received by way of dividend earned from mutual funds amounting to ₹3,46,952/-, interest on RBI tax free bonds at ₹1,57,254/- and interest on UTI tax free bonds of ₹1,201/-. The assessee, due to inadvertent mistake, included this income under the head income from other sources but, it was not claimed as exempt. The Department processed the return under Section 143(1) of the Act and taxed all these incomes. Subsequently, assessee moved rectification application dated 10^th June, 2025 claiming that under wrong premise, the assessee has included these incomes in the total income. However, the exempt income is clearly mentioned in details of exempt income as disclosed in Schedule E-1 at page 20 of Form ITR-4 duly filed with the Department. Learned Counsel stated that the Assessing Officer, without applying his mind to the rectification application, rejected the application solely on the reason that Hon'ble Supreme Court has clearly held in the case of Goetz (India) Ltd. (supra) that the Assessing Officer has not followed to entertain a claim made otherwise than by way of a revised return. Learned CIT(A) also rejected the claim of the assessee that the assessee has not made any claim neither in the original return of income nor filed a revised return of income. He also relied on the decision of Hon'ble Supreme Court in the case of Goetz (India) Ltd. (supra).

We have heard the rival contentions and perused the material placed before us. We noted that admittedly, the income was declared by the assessee in the total income under misconception i.e., dividend earned from mutual funds amounting to ₹3,46,952/-, interest on RBI tax free bonds at ₹1,57,254/- and interest on UTI tax free bonds of ₹1,201/- but, it is also a fact that the assessee has filed the details of these exempt incomes in Schedule-E at page 20 of Form ITR-4 duly filed under Section 139(1) of the Act. It is not disputed neither by the Assessing Officer during rectification proceedings nor by the learned CIT(A) or even now before us by the learned Senior DR, that these exempt incomes cannot be included in the total income for the purpose of computation of tax liability. The Assessing Officer and learned CIT(A) should have gone into the details and should have allowed the claim of exemption qua these incomes. As these are exempt income, we delete the addition and direct the Assessing Officer to exclude these exempt incomes from the total income for the purpose of computation of tax liability. Accordingly, the appeal of the assessee is allowed.

Coming to ITA No.2799/Del/2026, as the issue involved is same as in ITA No.2798/Del/2026 adjudicated by us in the earlier part of this order, and the exempt incomes are also in the nature of dividend earned from mutual funds, interest on RBI tax free bonds and interest on UTI tax free bonds, our decision in ITA No.2798/Del/2026 will apply in ITA No.2799/Del/2026 mutatis mutandis.

In the result, both the appeals of the assessee are allowed. Order pronounced in the open Court on conclusion of hearing on 13th July, 2026.