Income Tax: High Court Upholds Justice for Widow in Dispute Arising from Procedural Error in ITR Filing of Deceased Husband

In a recent judgement, the Gujarat High Court has ruled in favour of a widow, who made a mistake while filing her Income Tax Return (ITR) after receiving wrong advice from an advocate.

Kusumben Kishorkumar Rana’s husband, who worked at Oil and Natural Gas Company Limited (ONGC) was passed away in 2014. The total salary of her deceased husband for the AY 2014-15 was Rs 38,73,055.31, out of which Rs 9,90,334 TDS was deducted.

She filed an income tax return (ITR) for her deceased husband under her name for AY 2014-15, in which she wrongly declared Rs 30,63,639, and claimed Rs 9,90,334 to receive a refund of Rs 2,22,800, after receiving improper legal advice.

The tax department rejected her claim and raised a demand of Rs 11,80,800, in the order u/s 143(1), dated 19.01.2017, saying that the TDS was not deducted in the PAN of Kusumben. Therefore, she corrected this mistake by filing an application under section 154 of the Act on 31.01.2024. However, it was rejected by the Income Tax Department, saying that the TDS was not deducted in the name of the petitioner, which does not require any correction to the order passed under section 143(1). Due to this, Kusumben approached the Gujarat High Court.

The Gujarat High Court referred to an earlier judgement passed in the case of Income Tax Officer vs Ch. Atchaiah, in which it was ruled that the right person must be taxed under the Income Tax Act provisions. The court noted that Kusumben’s income declared in the ITR was not taxable for that Assessment Year. Therefore, the court quashed the order dated 19.01.2017 and allowed the widow to file the ITR for AY 2014-15 in the name of her late husband as legal representative.

The court also gave directions to the income tax department to register her as a legal representative on her Husband’s PAN and process her fresh ITR and to give her a full credit of the TDS.