2019 (3) TMI 1404 - HC - Income Tax

Revision Petition u/s 264 - petitioner s claim for depreciation is reflected in the return but not in the schedule - HELD THAT - Revised return ought to have been entertained. There is no scope for, in fact, filing a revision as rightly pointed out by the Commissioner. Nevertheless, what assumes importance is that in the factor of claim made by the petitioner in regard to depreciation. Therefore, revised return shall be accepted and appropriate order shall be passed, taking note of the claim for depreciation made by the petitioner, after affording an opportunity of being heard to the petitioner, within a period of two months from the date of receipt of a copy of this judgment. Till the revised order is passed, any demand based on the return shall not be enforced.

Issues:
1. Claim for depreciation in the e-returns filed by the petitioner for the assessment year 2010-11.
2. Rejection of the revised return and rectification filed by the petitioner.
3. Delay in filing the revision due to lack of awareness of the rectification orders.
4. Entitlement of the petitioner to have the revised return entertained under Section 264 of the IT Act.

Analysis:
1. The petitioner, a practicing lawyer and an assessee under the Income Tax Act, filed e-returns for the assessment year 2010-11, claiming a depreciation of &8377;1,11,338. However, the depreciation amount was not mentioned in the schedule of the return initially filed.

2. Subsequently, the petitioner filed a revised return within the stipulated time, which was rejected. The petitioner then filed for rectification, which was also rejected. The rejection of the rectification led to the petitioner filing a revision challenging the decision.

3. The delay in filing the revision was attributed to the petitioner's lack of awareness regarding the orders passed on rectification. The court noted that while the order of rectification was uploaded on the website, the hard copy was not communicated to the petitioner. Despite the delay, the petitioner's claim for depreciation was evident in the return, with the only defect being the non-inclusion in the schedule.

4. The court, after considering the circumstances, opined that the revised return should have been entertained. It was emphasized that there was no scope for filing a revision under Section 264 of the IT Act. The court acknowledged the importance of the petitioner's claim for depreciation and directed that the revised return be accepted. An opportunity for the petitioner to be heard was mandated, and an appropriate order regarding the depreciation claim was to be passed within two months from the date of receiving a copy of the judgment. The court also instructed that until the revised order is issued, any demand based on the return shall not be enforced.

In conclusion, the writ petition was disposed of with the direction to accept the revised return and process the claim for depreciation after affording the petitioner an opportunity to be heard, ensuring no enforcement of any demand until the revised order is issued.

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