The ITAT Mumbai considered the validity of a rectification order ...

Tribunal Rules Provident Fund Withdrawal Exempt, Orders Removal of Added Income from Rectification Order.

May 29, 2024

Case Laws     Income Tax     AT

The ITAT Mumbai considered the validity of a rectification order u/s 154 due to a discrepancy in income computation. The issue revolved around the treatment of a withdrawn amount from the provident fund (PF) as taxable income. The assessee, an employee deriving income from salary, disclosed the withdrawn amount as exempt income in the rectified return. The tribunal found that the sum withdrawn after more than five years of service was exempt u/s 10(12) of the Income Tax Act. The lower authorities' orders were deemed unsustainable as they overlooked the facts presented in the rectification applications. Consequently, the assessing officer was directed to delete the addition of the withdrawn amount from the provident fund, ruling in favor of the assessee.

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