# ITAT Chennai allows Rs 79.25 lakh gratuity deduction despite ITR error 2026-08-08T05:56:35+00:00 | Governance | Indian Opinion Desk Corroboration: 1 independent outlet ITAT Chennai has allowed a corporate taxpayer a Rs 79.25 lakh gratuity deduction that was denied because the claim was classified under the wrong section in its income tax return. The company had filed its ITR for FY 2020-21 declaring total income of Rs 38.1 lakh. The CPC revised this to Rs 1.18 crore, disallowing the gratuity under Section 43B on the ground that it was not reported in the tax audit report (Form 3CD). The taxpayer argued the gratuity had actually been paid during the year and the error was inadvertent. It filed a revised return and a rectification application under Section 154, both rejected. The CIT(A) upheld the disallowance. On June 24, 2026, the ITAT bench of Manu Kumar Giri and Manoj Kumar Aggarwal ruled in favour of the taxpayer, holding that the deduction could not be denied when the payment was genuine and the error was one of classification. ## Coverage - economictimes.indiatimes.com - livemint.com Tags: corporate tax, gratuity, income tax return, ITAT, Section 43B, tax deduction Canonical: https://indianopinion.org/itat-allows-gratuity-deduction-denied-due-to-itr-error/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/itat-allows-gratuity-deduction-denied-due-to-itr-error/#story-in-brief Review state: restored archive article, accurate at time of publication, not offered to search indexes.