Senior citizen wrongly paid tax on Rs 25.42L interest; ITAT orders Rs 9.91L refund
Each year, the senior citizen reported the interest earned from his investments in tax-free bonds under the ‘exempt income’ category in his income tax return (ITR). But made a mistake in one year. The man realised the error only after the deadline for filing a revised ITR had passed. He therefore approached the jurisdictional assessing officer (JAO) and filed a rectification application.
A senior citizen in Gurugram successfully challenged the Income Tax Appellate Tribunal (ITAT) Delhi's ruling that he had erroneously paid tax on interest earned from tax-free bonds. The individual, who invested Rs 3 crore in government tax-free bonds in 2013, mistakenly treated Rs 25.42 lakh in interest as taxable income when filing his return for AY 2022-23.
As a result, he paid Rs 9.91 lakh in income tax, which he was not required to pay since the investments were tax-free by definition. After realizing the error and realizing he could not file a rectification application within the deadline, the senior citizen approached the JAO and filed a rectification application under Section 154.
However, the JAO rejected the request, citing the Supreme Court's decision in Goetze (India) Ltd. v. CIT. The senior citizen then appealed to the ITAT Delhi, which ruled in his favor. The tribunal held that the ruling in Goetze (India) Ltd. did not apply to the present case and referred to the Kapil Dev Nikhanj case, which stated that appellate authorities have the power to entertain rectification requests.
The ITAT Delhi directed the assessing officer to treat the interest from the IIFCL and REC tax-free bonds as exempt income under Section 10(15)(iv)(h) and ordered a refund of Rs 9.91 lakh, including interest, to the senior citizen.
Brief written by urgent.news from Times of India's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
