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KNews Desk: If a taxpayer inadvertently makes a wrong entry while filing Income Tax Return (ITR), then that amount cannot be treated as income and taxed on that basis alone. Mumbai-based Income Tax Appellate Tribunal (ITAT Mumbai) has rejected the increase in taxable income of Rs 9.6 lakh, giving a big relief to the salaried taxpayer in an important case. The tribunal held that mere clerical or data-entry error in ITR cannot be evidence of actual income.

The case pertains to Mr. Golay, resident of Belapur Road, Mumbai. He filed his ITR on July 25, 2022. In this he had declared a total salary income of Rs 28.25 lakh. However, the person helping in preparing the ITR made a mistake and an amount of Rs 9.6 lakh was reported as tax-free income under section 10(11).

How did the tax dispute start?

Mr. Gole worked as a plant manager in a private company in Gujarat. His provident fund came under EPFO. He had neither withdrawn any amount from his EPF account nor received any payment or interest of Rs 9.6 lakh from EPFO.

Despite this, the Income Tax Department asked him for documents to this amount and proof of his claim of tax exemption. The Assessing Officer (AO) held that Golay had not been able to provide sufficient documents in respect of the tax-free amount of Rs 9.6 lakh. After this, by completing the assessment under section 143(3) and 144B on March 11, 2024, Rs 9.6 lakh were added to his income.

The Commissioner of Appeals (CIT-A) also upheld this increase. After this Gole approached ITAT Mumbai. Chartered accountant Tarun Gupta presented his case in ITAT and on 19 June 2026, the tribunal ruled in his favour.

What evidence did the taxpayer provide?

Golay told ITAT that the amount of Rs 9.6 lakh recorded in the ITR was merely a clerical and data-entry mistake. In fact he never received this amount.

In support of his argument, he presented documents like Form-16, Form 26AS, bank statement, EPFO ​​account statement, bank reconciliation details and affidavit. An attempt was made to show through these documents that neither any withdrawal took place from EPF nor Rs 9.6 lakh was deposited in any of his bank accounts in the relevant financial year.

He also informed that no deduction of Rs 9.6 lakh was made from his salary while computing taxable income in ITR. That means he did not get any tax benefit from this wrong entry.

What did ITAT say?

ITAT Mumbai held that the Income Tax Department could not produce any concrete evidence of actual receipt of Rs 9.6 lakh. There was neither proof of payment from EPFO, nor of withdrawal from the EPF account, nor of deposit of the relevant amount in the bank account.

The tribunal also said that the affidavit submitted by Golay cannot be ignored on the basis of mere suspicion or conjecture. If the department considers an affidavit to be false, it will have to present concrete evidence against it.

Important comment on section 10(11) also

In this case, ITAT also pointed out that the use of section 10(11) was also not correct. This provision pertains to payments received from the Statutory Provident Fund or certain notified PFs under the Provident Funds Act, 1925. Whereas, Gole was working in a private company and his PF came under the purview of Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

In this way, ITAT gave relief to the taxpayer by removing the increase in income of Rs 9.6 lakh. The important message of the judgment is that Any wrong amount entered in ITR cannot be treated as real income only when the taxpayer proves through reliable documents that he had not actually received that amount.