2019 (7) TMI 712 - HC - Income Tax

Stay of recovery of tax due - defective return filed - AO raised a demand by referring to the incomplete return - petitioner therefore was advised to file a request for rectification of the return before the first respondent. The request is made under Section 264 - HELD THAT - Sri. Christopher Abraham, the learned Standing Counsel, having regard to the scheme under Sections 143(1), 154 and 264 of the Income Tax Act fairly states that the observation or the view as held in Ext.P8 is unsustainable and the first respondent has jurisdiction and authority to do the needful on the request of petitioner in accordance with law. The respondents have received notices and have not filed counter affidavit. The statement of Sri Christopher Abraham is placed on record and accepted. The order in Ext.P8 is accordingly set aside and matter remitted to first respondent for consideration and disposal under Section 264 within eight weeks from the date of receipt of a copy of this judgment.

Summary

Issues: Jurisdiction of the First Respondent under Section 264 of the Income Tax Act

Analysis:
The petitioner sought relief through a writ petition to quash Exhibit P8 and stay the recovery of tax due under Exhibit P4. The petitioner's case revolved around a defective income tax return filed for the assessment year 2014-15, which omitted the aggregation of income in the revised return. This omission led to the Assessing Officer raising a demand based on the incomplete return. The petitioner then filed a request for rectification under Section 264 of the Income Tax Act, resulting in Ext.P8. The first respondent, in the order, stated that since the assessment orders were passed by the Centralized Processing Centre (CPC), the application for revision under Section 264 by the petitioner could not be maintained in law. The first respondent's view was that only the Principal Commissioner or the Commissioner could revise orders passed by a subordinate authority, and as the order under Section 154 was passed by the CPC, it could not be interfered with. The petitioner challenged this view through the writ petition.

The learned Standing Counsel for the Income Tax Department acknowledged that the view expressed in Ext.P8 was unsustainable. He conceded that the first respondent had the jurisdiction and authority to act on the petitioner's request in accordance with the law. Despite receiving notices, the respondents did not file a counter affidavit. In light of this, the Court set aside the order in Ext.P8 and remitted the matter to the first respondent for consideration and disposal under Section 264 within eight weeks from the date of the judgment. The writ petition was disposed of accordingly. The judgment clarified the jurisdiction of the first respondent under Section 264 of the Income Tax Act, emphasizing that the Centralized Processing Centre's involvement did not preclude the first respondent from revising orders in appropriate cases.