Wrong ITR Form 4 intstead of ITR 3 Cannot Justify Double Taxation: ITAT
This order by the ITAT Chandigarh Bench (‘B’) in ITA No. 707/CHD/2026 (Assessment Year: 2017–18), pronounced on September 2, 2026, rules in favor of the assessee (Shri Balbir Singh vs. ITO, Ward-1, Nahan), deleting an addition made due to a procedural return-filing error.
Case Background
-
The Issue: The assessee filed his return in ITR-4 (Sugam) declaring business income from mobile recharge and SIM card sales. During processing under Section 143(1), CPC noticed commission receipts of ₹26,69,319 in Form 26AS and added the entire gross amount to his income, creating a tax demand.
-
Lower Authorities: The assessee’s Section 154 rectification application was rejected. On appeal, the CIT(A) dismissed the case, holding that the assessee mistakenly filed ITR-4 instead of ITR-3 and failed to substantiate his claim of double addition with a revised return.
Key Findings & ITAT Ruling
-
Substance Over Form: The Tribunal held that the Revenue cannot exploit an inadvertent procedural mistake (selecting ITR-4 instead of ITR-3) to tax the same income twice. Filing an incorrect return form does not render previously disclosed income “undisclosed.”
-
No Double Taxation of 26AS Receipts: Once net income from business receipts has already been declared and offered to tax, a mismatch with Form 26AS cannot justify taxing the entire gross receipt again unless the Revenue proves it represents a separate, undisclosed income stream.
-
Distinction from Goetze (India) Ltd.: The Tribunal clarified that the Supreme Court’s restriction in Goetze (India) Ltd. applies to the Assessing Officer’s powers and does not curtail appellate authority powers under Section 254. Moreover, the assessee was not claiming a fresh deduction, but rather contesting double addition.
-
Verdict: The CIT(A)’s order was set aside, the addition of ₹26,69,319 was deleted, and the appeal was allowed.