The Allahabad Income Tax Appellate Tribunal (ITAT) reportedly deleted an ₹80,60,870 addition made after a sales figure was entered incorrectly in an income-tax return. The deciding factor was not simply that the taxpayer described the entry as a typo: according to Taxscan’s 6 October 2026 report, the sales discrepancy had already been examined during scrutiny against VAT returns, and the later Section 154 action did not identify an apparent mistake in that earlier assessment.
What the Allahabad ITAT decided
In Amar Nath Seth v. Income Tax Officer, Ward-3(2), Mirzapur, ITA No. 51/ALLD/2024, reported as 2026 TAXSCAN (ITAT) 1405, the Allahabad Bench reportedly allowed the taxpayer’s appeal, quashed a rectification under Section 154, and deleted the ₹80,60,870 addition. Taxscan reports that the decision was delivered on 29 September 2026 by Vice President Kul Bharat and Accountant Member Nikhil Choudhary. These case details are based on Taxscan’s secondary report; its linked order has not been independently verified here. Taxscan’s report, published 6 October 2026.
How the sales figures differed
Taxscan reports that Seth repaired mobile sets and sold animal fodder, and declared business income under Section 44AD. His reported actual gross sales were ₹8,95,654, but a clerical error during return preparation allegedly put sales at ₹89,56,524 in the income-tax return. The difference between those figures is ₹80,60,870—the amount later added through rectification.
During scrutiny, Seth reportedly submitted his trading account, profit and loss account, balance sheet and VAT returns. The report says he brought the discrepancy to the assessing officer’s attention and that the officer checked the VAT return and accepted ₹8,95,654 as actual sales.
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Why the matter returned under Section 154
After scrutiny, a Revenue Audit Party objected to the difference between the ITR and the financial statements. The assessing officer then invoked Section 154 and added ₹80,60,870, treating the discrepancy as a mistake to be rectified. The Commissioner of Income Tax (Appeals) upheld the addition after Seth did not file written submissions despite hearing notices, according to Taxscan.
At the ITAT, Seth argued that the officer could not use rectification to reverse a view already taken after inquiry, and that the VAT returns supported the lower sales figure. The Revenue argued that the case should be sent back to the CIT(A) for a decision on the merits. Those were the parties’ positions; the reported result was the tribunal allowing Seth’s appeal.
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Why the reported ruling turned on the earlier scrutiny
As Taxscan describes the tribunal’s reasoning, the officer had already examined the sales difference against VAT returns and accepted that the higher ITR figure arose from a typographical error. The subsequent audit-objection-led action did not, in the tribunal’s reported view, point out what apparent mistake the original enquiry had made. Taxscan reports that the tribunal characterized the action as based on “borrowed satisfaction” rather than a demonstrated mistake apparent from the record.
The report reproduces this sentence as the tribunal’s explanation: “That being the case, the same could not have been held to be as a mistake apparent from the record without pointing out the facts of what the mistake was.” This is a quotation reproduced by Taxscan, not one independently checked against the order text.
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What taxpayers can—and cannot—infer
The decision, as reported, is tied to its procedural history: the discrepancy was raised and checked during scrutiny, with VAT returns among the material considered, before Section 154 was used to add the difference. It does not establish that every incorrect sales entry is harmless or that an assessee can rely on a typo explanation without supporting records. The reported outcome addresses the later rectification in this case, not a general exemption from accurate reporting or from scrutiny.
For a taxpayer facing a similar discrepancy, the practical issue is whether records submitted during assessment support the corrected figure and whether the later action identifies a mistake that can properly be rectified. Preserve the return, books and relevant indirect-tax returns, and respond to notices with documents that reconcile the reported figures. The case-specific report does not establish how another taxpayer’s facts or procedural posture would be decided.
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