Ajay Kumar Bakaya vs. ACTI

Parties Involved

Facts Summary

Ajay Kumar Bakaya, the appellant, filed an appeal against the order of the Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2022-23. The appellant, a resident senior citizen, had invested in tax-free bonds issued by India Infrastructure Finance Company Ltd. (IFCL) and Rural Electrification Corporation Ltd. (REC). For the year under consideration, the appellant mistakenly included the interest income from these bonds as taxable income, resulting in an excess payment of tax. The appellant filed an application under section 154 of the Income-tax Act, 1961, requesting rectification of the mistake and a refund of the excess tax paid. However, the Assessing Officer rejected the application, and the order was sustained by the Commissioner of Income Tax (Appeals). The appellant appealed to the Income Tax Appellate Tribunal, seeking rectification of the error and a refund of the excess tax.…

Legal Issues

• 1. Whether the interest income from tax-free bonds should be treated as exempt income?
• 2. Whether the Assessing Officer was justified in rejecting the rectification application?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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