9911796707
TMI Blog2021 (4) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... dvance Tax, the refund was determined at Rs. 34,320/-. However, while filing return of income on 20th July 2018 for A.Y 2018 - 19, the figure of long term capital gains of Rs. 3,07,60,800/was purported to have been wrongly copied by Petitioner's Accountant from the return of income filed for the earlier assessment year i.e. A.Y 2017-18, which had arisen on surrender of tenancy rights by the Petitioner for that year. It is submitted that the assessment for A.Y 2017-18 was completed under section 143 (3) of the Income Tax Act vide Assessment Order dated 24 December 2019. Petitioner submits that she has not transferred any capital asset and there can be no capital gains in the assessment year under consideration and therefore no tax can be imposed on such non-existent capital gains for A. Y. 2018-19. 3. It is submitted that the returns filed by the petitioner for A.Y 2018 - 19 were processed under section 143 (1) of the Income Tax Act vide order dated 2nd May 2019 and a total income of Rs. 3,34,66,446/including long term capital gains of Rs. 3,07,60,800/- purported to have been inadvertently shown in the return of income thereby raising a tax demand of Rs. 87,40,612/-.It is the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de order dated 12th February, 2021, the Respondent No. 2 Principal Commissioner of Income Tax - 19 dismissed the application filed by Petitioner on the ground that, the same was not maintainable on account of alternate effective remedy of appeal and that assessee had also not waived right of appeal before the Commissioner of Income Tax (Appeals) as per provisions of section 264 (4) of the Income Tax Act. 8. Being aggrieved by the order of rejection of the application under section 264 of the Income Tax Act, Petitioner is before us seeking the following reliefs: "(a) That this Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction order or a writ including a writ in the nature of 'Certiorari' to call for the records of the application filed by the Petitioner under section 264 and the order passed thereon dated 12.02.2021 and quash the same and direct the Respondent No.2 to decide the application filed under section 264 of the Act on merits afresh and grant relief prayed for in the application after appreciating facts of the case and submissions made by the Petitioner. (b) That this Hon'ble Court may be pleased to issue unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 143 (1) of the Income Tax Act. He has relied upon paragraphs 35 to 40, which are quoted as under: "35:-From the various judicial pronouncements, it is settled that the powers conferred under section 264 of the Act are very wide. The Commissioner is bound to apply his mind to the question whether the petitioner was taxable on that income. Since section 264 uses the expression "any order", it would imply that the section does not limit the power to correct errors committed by the subordinate authorities but could even be exercised where errors are committed by assessees. It would even cover situations where the assessee because of an error has not put forth a legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time in an application under section 264. 36:- An assessee is liable to tax only upon such receipt as can be included in his total income and is assessable under the Income Tax Act. There is nothing in section 264, which places any restriction on the Commissioner's revisional power to give relief to the assessee in a case where the assessessee detracts mistakes because of which he was over-asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light of the Circular No.14(XL35) of 1955, dated April, 1955 and article 265 of the Constitution of India. The Commissioner has erred in not doing so and in failing to exercise the jurisdiction vested in him on mere technical grounds. 40:- In view of the above, the impugned order dated November 20, 2012 is set aside. The revision application under section 264 of the Act is restored to the file of the Commissioner. The Commissioner is directed to consider the same afresh on merits and dispose the same within a period of eight weeks from today. The writ petition is disposed of leaving the parties to bear their own costs." 11. Mr Gopal also refers to the decision of this court in the case of Universal Packaging and Others v/s. Commissioner of Income Tax [2013] 352 ITR 398 (BOM) to submit that in almost similar circumstances, this court has held that such an order passed by the Commissioner of Income Tax is a non-speaking order as it does not consider Petitioner's case on merits who had dismissed the same on the ground of alternate remedy of filing an appeal. In support he quotes the following paragraph from placetum 6 at page 401 as under: " .... .... .... .... .... .... It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tently been copied by petitioner's accountant from the return for A. Y. 2017-18. The assessment for A.Y 2017 - 18 was completed under section 143 (3) of the Income Tax Act vide Assessment Order dated 24th December 2019. In the financial year corresponding to A.Y 2018-19, Petitioner received income from house property of Rs. 12,69,954/- and income from other sources Rs. 14,35,692/- making the total income to Rs. 27,05,646/- and after claiming deductions and set off on account of TDS and advance tax, a refund of Rs. 34,320/- was determined. No capital asset transfer had taken place during A. Y. 201819, therefore no tax on capital gains can be imposed. The error had crept in through inadvertence. There is neither any fraud nor malpractice alleged by the Revenue. The rectification application u/s 154 filed earlier is stated in the Respondent's affidavit to have been rejected. The application under section 264 has been dismissed/rejected on the ground that application is not maintainable as alternate effective remedy of appeal is available and there is no waiver of appeal by the assessee. Since the basic facts are not in dispute, it would be in the fitness of things for us to come strai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Assessing Officer. Holding the said order to be a nonspeaking order, not considering the petitioner's case on merits by dismissing the same on the ground of alternate remedy of filing appeal, this court quashed and setaside the said order of the Commissioner stating that the same was in violation of the basic principles of natural justice. In the facts of the present case also the Commissioner has not considered Petitioner's case on merits and simply on the ground of alternate remedy of filing appeal has rejected the application under section 264 of the Income Tax Act. Therefore on the basis of this decision also the Commissioner's order is liable to be set-aside. 18. For the sake of convenience section 264 of the Income Tax Act is quoted as under:- "264. Revision of other orders (1) In the case of any order other than an order to which section 263 applies passed by an authority subordinate to him, the Commissioner may, either of his own motion or on an application by the assessee for revision, call for the record of any proceeding under this Act in which any such order has been passed and may make such inquiry or cause such inquiry to be made and, subject to the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such appeal may be made has not expired or second, where the assessee has not waived his right of appeal. What emerges is that in a situation where there is an appeal that lies to the Commissioner appeals and which has not been made and the time to make such an appeal has not expired in that case the Principal Commissioner or Commissioner cannot revise any order in respect of which such appeal lies. The language is quite clear that the two conditions are cumulative viz: there should be an appeal which lies but has not been made and the time for filing such appeal has not expired in such a case the Principal Commissioner cannot revise. However, if the time for making such an appeal has expired then it would be imperative that the Principal Commissioner would exercise his powers of revision under section 264. The other or second situation is when the Petitioner assessee has not waived his right of appeal; even in such a situation the Commissioner cannot exercise his powers of revision under section 264 (4) (a). In clause (a) of section 264 (4), in the language between filing of an appeal and the expiry of such period and the waiver of the assessee to his right of appeal there is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, in our view, is uncalled for and would be wholly avoidable. The provisions in the Income Tax Act for rectification, revision under section 264 are meant for the benefit of the assessee and not to put him to inconvenience. That cannot and could not have been the object of these provisions. We do not find any statement either in the impugned order or in the reply to state that the case of the Petitioner seeking remedy of the purported error was not bona fide.
22. In the light of the above discussion, we find that the order dated 12th February 2021 passed by the 2nd Respondent- Principal Commissioner is unsustainable and deserves to be set-aside.
23. The order dated 12th February 2021 passed by Respondent No.2 is set aside. We direct Respondent No. 2 to decide the application filed by petitioner under section 264 afresh on merits and after hearing the Petitioner, pass a reasoned/speaking order in line with the aforesaid discussion for grant of relief prayed for in the said application.
24. Petition is allowed in the above terms. No order as to costs.
25. Parties to act on a copy of the of the order authenticated by the associate of this court. X X X X Extracts X X X X X X X X Extracts X X X X
|
