TMI Blog2017 (9) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... airs to plant and machinery that too in an increasing in manner, clearly indicates a position otherwise. Further, on facts, the first respondent found that the assessee has not been able to prove with evidence that there has been no business activity during the impugned assessment year. Thus, the first respondent having done a factual exercise, in exercise of his power under Section 264 and on facts, found that the theory as propounded by the petitioner as a keying error to be not proved conclusively. In such fact situation, the order passed by the first respondent calls for no interference. - W. P. No. 10599 of 2017, W. M. P. No. 11537 of 2017 - - - Dated:- 4-9-2017 - T. S. Sivagnanam, J. For the Petitioner : Mr.M.P.Senthilkumar For the Respondents : Mrs.Hema Muralikrishnan ORDER The petitioner challenges the order passed by the first respondent, dated 22.03.2017, under Section 264 of the Income Tax Act, 1961, (hereinafter referred to as Act ) relating to the assessment year 2012-13. 2. The petitioner's case is that their main source of income is rental income offered under the head income from house property . For the assessment year 2012-13, the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advantage of mere clerical error committed while filing the electronic income tax return, more so, when the CBTD has issued circular directing the officers to assist the tax payers in arriving at a correct income and tax. That the decision of the Hon'ble Supreme Court in the case of M/s.Goetze India (supra), is not applicable to the appellate or revisional authorities under the Act and the first respondent being the revisional authority has vide powers including the power to set aside the assessment, which power had been removed from the Commissioner of Appeals w.e.f., 01.06.2003. In support of his contentions, the learned counsel relied on the decisions in the case of Sri Selvamuthukumar vs. Commissioner of Income-tax, Chennai-VI, reported in [2017] 79 taxmann.com 113 (Madras); Rajesh Kumar Aggarwal vs. Commissioner of Income-tax, Delhi-VIII, reported in [2017] 78 taxmann.com 265 (Delhi); Ramco Cements Ltd., vs. Deputy Commissioner of Income Tax reported in 373 ITR 146 (Mad); Commissioner of Income Tax vs. Rai Bahadur Bissesswarlal Motilal Malwasie Trust reported in (1992) 195 ITR 0825; and Commissioner of Income Tax vs. Valli Cotton Traders (P) Ltd., reported in (2007) 288 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Therefore, the first respondent rightly held that the income reported under the head business income could very well be income from business. Thus, in the absence of any material evidence to prove that there was no business activity and the admission of the income under the head 'business' was a pure inadvertence cannot be believed. 6. Heard the learned counsels appearing for the parties and perused the materials placed on record. 7. The questions which arise for consideration are (i) Whether the Principal Commissioner of Income Tax, the first respondent was right in rejecting the Revision Petition filed by the petitioner under Section 264 of the Act against the order passed by the Assessing Officer, the second respondent, who rejected the petitioner's request to rectify the assessment for the assessment year 2012-2013 ? (ii) whether the Assessing Officer was right in relying on M/s.Goetze India (supra), to reject the request for rectification? (iii) What are the powers of the Commissioner under Section 264 of the Act ? (iv) Whether, on the grounds canvassed by the petitioner the impugned order passed by the Commissioner under Section 264 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority is vested with the power, which is co-terminus with that of the Original Authority, to allow the assessee to raise additional ground, if the same is bona fide and not willful or unreasonable. 11. Thus, the legal principle which emerges from the above decisions are:- (i) The Assessing Officer cannot entertain a claim for deduction otherwise than by filing a revised return. This does not impinge upon the power of the ITAT under Section 254 of the Act. (ii) The language of Section 264 provides ample power to the CIT to make or cause such inquiry to be made as he thinks fit in dealing with application for revision under Section 264 of the Act. (iii) Limiting the power of the CIT only to the situation that was existing at the time of making assessment is to make the power of the CIT under Section 263 too restrictive. (iv) Material which was not available to the ITO when he made the assessment could be taken into considerations by CIT after holding an enquiry, though such material has come on record subsequent to the making of the assessment. (v) The power under Section 264 of the Act is a wide power, and one that is intended to prevent miscarriage of ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inions and requested the second respondent to rectify the same. The second respondent after taking note of the stand taken by the petitioner in the aforementioned communication, passed the assessment order, dated 26.02.2015 and rejected the petitioner's claim to rectify the mistake. The reasons assigned by the second respondent is that if there is any keying mistake, the assessee could have filed a revised return, as allowed under Section 139(4) of the Act, which could have been done on or before 31.03.2014. However, the petitioner did not do so and asked to reduce the total income during the course of assessment proceedings and that being a fresh claim cannot be entertained during the course of assessment proceedings. In support of such stand, the second respondent relied on the decision of the Hon'ble Supreme Court in the case of M/s.Goetze India (supra). Thus, the total income admitted as per the return of income was determined as ₹ 32,71,620/- and tax payable thereon was intimated to the petitioner in the form of a demand. The reasons assigned by the second respondent is perfect and in order, so also the reliance placed on M/s.Goetze India (supra). On the given fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity of letting out of building on rent. Thus, the first respondent stated that a company which is claiming no business activity with no receipts other than rental receipts and interest income, have claimed expenditure on repairs to plant machinery and this is in an increasing manner will indicate the factual position otherwise. Thus, on facts, the first respondent found that the nature of the expenses indicates the presence of some business activity during the relevant previous year. 14. Thus, taking note of the contrary stand taken by the petitioner in reporting its return of income amounts, in respect of business income and expenses which have been incurred by the petitioner during the last two years and on the other hand, making a contrasting claim that there is no business activity relatable to those expenses/income and that the figures reported in the return of income are not inadvertent errors. Thus, the first respondent held that the petitioner has not been able to prove with evidence that there has been no business activity during the impugned assessment year. That apart, the first respondent noted that the petitioner has come forward with the theory of an error be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o examine as to the bonafides of the stand taken by the petitioner alleging that it was an inadvertent keying error. On a comparative analysis of the returns filed for the assessment year 2011-12, with that of the returns filed for the assessment year 2012-13, the first respondent noted that for repairs to machinery, telephone expenses, salary and other expenses, depreciation have been incurred and debited to P L account, which is a clear indicator that business activity is being carried out by the assessee. When that being the factual position, the assessee would not have debited the expenses in its P L account. 16. Thus, on facts, the first respondent found that a company, which is claiming no business activity with no other income other than rental income and interest income claiming expenditure on repairs to plant and machinery that too in an increasing in manner, clearly indicates a position otherwise. Further, on facts, the first respondent found that the assessee has not been able to prove with evidence that there has been no business activity during the impugned assessment year. Thus, the first respondent having done a factual exercise, in exercise of his power under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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