2013 (10) TMI 102 - HC - Income Tax

Mistake in the order to grant deduction under Chapter VI-A - Deduction u/s 80IB of the Income Tax Act - Held that - There is obvious mistake in refusing to grant deduction under Chapter VIA of the Act of total amount of Rs.1,02,04,258/ out of gross total income of Rs. 1,69,25,004/. It is submitted that such mistake shall be rectified within a period of one week and consequential order shall be passed thereafter within a period of two weeks giving effect to such rectification - Respondent no.1 is directed to act as stated above and rectify its mistake and pass further consequential order within a period stipulated hereinabove Decided in favor of Assessee.

Summary

Issues:
Claim of deduction under Section 80IB of the Income Tax Act, 1961

Analysis:
The petitioner filed a petition under Article 226 of the Constitution of India seeking to quash the impugned orders and notice of demand related to the claim of deduction under Section 80IB of the Income Tax Act, 1961. The petitioner contended that the claim for deduction was included in the Ereturn filed for the assessment year 2008-09. However, the Assessing Officer ignored this claim and assessed the petitioner's total income without considering the deduction claimed, leading to a higher tax liability. The petitioner's rectification application and revision petition under Section 264 of the Act were both rejected on the grounds that the claim was never lodged. The petitioner's counsel argued that the claim was indeed included in the filed return and should have been acknowledged by the Assessing Officer.

In response to the notice from the Court, the revenue's counsel acknowledged the mistake in refusing to grant the deduction claimed by the petitioner. It was admitted that there was an error in not allowing the deduction under Chapter VIA of the Act, which would result in a significant reduction in the tax liability. The revenue assured the Court that the mistake would be rectified within a week, and consequential orders would be passed thereafter to reflect the rectification. It was agreed that upon rectification, there would be no outstanding tax demand against the petitioner.

The Court directed the concerned respondent to rectify the mistake and pass consequential orders within the stipulated time frame. Upon rectification of the error, the Court quashed the impugned orders and notice of demand, thereby disposing of the Special Civil Application filed by the petitioner. The Court granted permission for direct service regarding the judgment.