The return of the assessee was processed under Section 143(1). As per the intimation received under Section 143(1), the income and the rate of tax were different from the return as furnished by him. The assessee immediately moved an application under Section 154 stating that as per intimation under Section 143(1), Short-term capital gain ('STCG') was taxed at normal rates instead of special rates. According to the AO, the proper remedy for assessee was filing of revised return instead of moving an application under Section 154 because the assessee had not shown STCG under Section 111A in Schedule CG of the e-return. Thus, he rejected the rectification application. The assessee couldn't succeed even before CIT(A).
On appeal, the Tribunal held in favour of assessee as under:
1) The present system of e-filing of return is totally dependent upon the usage of software;
2) The return is prepared electronically which is converted into XML file;
3) There is every possibility of entering incorrect data without having the expert knowledge of preparing an XML file;
4) XML file so created is uploaded to the official website of Income tax department;
5) Keeping in mind this system of e-filing of the returns, it is clear that assessee had claimed STCG and had shown it in e-return but the same figure did not appear under the item where the STCG is to be taxed at special rate under Section 111A of the Act;
6) However, under 'Schedule SI-income chargeable to income tax at special rates', the assessee had shown 10% tax on STCG, which clearly establishes that the assessee had shown STCG liable to be taxed at special rate of 10%.
Therefore, the appeal of the assessee was allowed and the AO was directed to rectify the intimation under Section 143(1) - SHRIKANT REAL ESTATES (P.) LTD. v. ITO  26 taxmann.com 265 (Mumbai - Trib.)
TAGS-section 154 application,application under section 154,section 154,section 154 income tax,income tax section 154,section 154 of income tax act