(Bombay HC in Swaminarayan Mandir Trust WP 2162 of 2025)

Tax return filing today is largely a digital exercise. But while computers process numbers, humans still punch them in. And when humans punch, mistakes are inevitable. The important question is — should a taxpayer suffer tax liability merely because of a clerical or punching error in the return?

The Bombay High Court has recently delivered a very practical and taxpayer-friendly ruling answering this question in Swaminarayan Mandir Trust vs CIT (Exemptions).

BOMBAY HC WRIT PETITION NO.2162 OF 2025 ORDER.pdf None

And the judgment is important not only for trusts, but for every taxpayer who has ever realised after filing the return that something went wrong.

The Story: When One Wrong Entry Cost a Trust Its Exemption

The petitioner trust was registered under section 12A and therefore eligible for exemption under section 11. For AY 2018-19, it filed its return declaring income of about ₹16.46 lakh.

However, while filing the return, the trust punched certain receipts and figures in the wrong schedules/fields. Because of this data entry mistake:

the CPC processed the return under section 143(1),

exemption under section 11 got denied,

and a tax demand was raised.

The trust then tried everything:

 Rectification applications

 Another rectification attempt

 Yet another application

All were rejected on the ground that there was no mistake apparent from record.

Finally, the trust invoked revision jurisdiction under section 264.

But the Commissioner rejected it too, saying:

the system processed what the assessee filed,

the mistake was the taxpayer’s, not the Department’s,

the trust should have filed a revised return,

and the remedy was appeal, not revision.

The matter reached the Bombay High Court.

The Core Legal Question

The real issue before the Court was:

 Can Section 264 be used to correct mistakes committed by the taxpayer himself in the return?

 Or is it only for correcting errors of the tax department?

This distinction is crucial. Because in real life:

wrong schedule selection

incorrect head of income

missed exemption claim

typing mistakes in figures

are extremely common.

What the Bombay High Court Held

The Court gave three very important findings.

1. Taxpayer can choose appeal OR revision

The Department argued that since the order was appealable, the taxpayer should have gone to CIT(A).

The Court rejected this argument and held:

 The assessee has the discretion to choose between appeal and revision.

 Authorities cannot refuse revision merely because appeal was possible.

This is a very important procedural clarification.

2. Section 264 powers are extremely wide

The Court reiterated that Section 264 is meant to prevent miscarriage of justice.

It clearly held:

 The Commissioner can correct not only departmental mistakes

 but also mistakes committed by the assessee

 even if the claim was not made in the return

This observation is extremely powerful because it recognises the real-world nature of return filing errors.

3. Goetze (India) ruling does NOT restrict Section 264

Revenue relied on the famous Supreme Court ruling in Goetze (India) Ltd., which says fresh claims cannot be made without filing a revised return.

But the High Court clarified:

 That ruling applies to assessment proceedings, not to revision powers under Section 264.

 Section 264 is wider and meant to grant relief where legally permissible.

This clarification removes a common objection raised by tax officers.

Final Outcome

The High Court:

 quashed the Commissioner’s order,

 restored the revision application,

 directed fresh consideration,

 and ordered disposal within 12 weeks. �

BOMBAY HC WRIT PETITION NO.2162 OF 2025 ORDER.pdf None

In short — the taxpayer got another chance to claim lawful exemption.

Why This Judgment Matters in Practice

This ruling has huge real-life implications.

Because today’s compliance environment creates exactly such problems:

1. CPC adjustments based on ITR fields

If income is shown in wrong schedule, exemption may vanish automatically.

2. Revised return time often expires

By the time mistake is noticed, revision window may be over.

3. Rectification often fails

Section 154 is limited to “mistake apparent from record”.

4. Appeal may be expensive or impractical

Especially for small taxpayers or trusts.

In such cases, Section 264 becomes the only lifeline.

This judgment strengthens that lifeline.

Key Takeaways for Taxpayers

 Section 264 can be used to correct taxpayer’s own mistakes

 Fresh claims can be considered in revision

 Appeal is not compulsory before filing revision

 Goetze ruling does not block Section 264 relief

 Revision jurisdiction is meant to ensure substantive justice over technical error

The Larger Message

The judgment reflects a simple but important tax principle:

 Tax must be levied according to law, not according to typing mistakes.

Digital filing may be automated, but justice cannot be automated.

And this ruling reminds the tax administration that procedural errors should not defeat legitimate exemptions.

For taxpayers, professionals, and trusts alike, Section 264 now stands reaffirmed as:

Not just a revision provision — but a safety valve against human error.