2024 (12) TMI 1271 - HC - Income Tax

Revision u/s 264 - SRO values prevailing as on the date of agreement and the date of registration - HELD THAT - Even if, an error is committed by an Assessee, it can be gone into in exercise of power conferred u/s 264 of the Act, which was held to be very wide . Considering the aforesaid, the first reason for not exercising power under Section 264 cannot sustain judicial scrutiny. Even if details about SRO value is not disclosed in the Return, revision u/s 264 of the Act is indeed maintainable. It is another aspect, where after considering the matter, the revision authority may take a different view on merits, but, it cannot decline consideration, when the Assessee commits a mistake/error. Secondly, as rightly highlighted by learned counsel for the petitioner, the application under Section 264 was rejected by stating that the application under Section 264 is filed, just to get advantage of reduction in SRO values. No iota of reason is mentioned in the impugned order as to why the Annexure-II showing SRO rates mentioned in para No.4 of the impugned order was not applicable or trustworthy. No other SRO value, which is held to be reduced one, is also mentioned. We are convinced that both the reasons for not entertaining the application u/s 264 of the Act are unjustifiable.

Summary

Issues:
Challenge to disallowance of application under Section 264 of the Income Tax Act, 1961 based on reasons of not claiming benefit of SRO rates and seeking advantage of reduction in SRO values.

Detailed Analysis:
The petitioner challenged the order disallowing their application under Section 264 of the Income Tax Act, 1961. The impugned order rejected the revision mainly on the grounds that the petitioner did not claim the benefit of Stamp Registration Office (SRO) rates while filing the income tax return and filed the application under Section 264 to take advantage of reduced SRO values. The petitioner contended that they had submitted Annexure-II to establish the SRO value and cited a Delhi High Court judgment to support the argument that even errors by an assessee can be a reason to exercise power under Section 264. However, the standing counsel for the Income Tax Department supported the impugned order, stating that the due process was followed in passing the order.

The impugned order highlighted that the petitioner voluntarily admitted the difference between the registered sale deed value and the actual sale consideration and paid taxes accordingly. It was noted that the petitioner claimed the relief was not claimed earlier due to non-availability of SRO values and to avoid litigation and penalties. The order emphasized that the petitioner had sufficient time to claim the actual price in the return of income and that the revision under Section 264 was an afterthought to benefit from reduced SRO values. The petitioner argued that the findings were unjustified as no material was provided to show how the petitioner sought to take advantage of reduced SRO values.

The judgment referred to the Delhi High Court's opinion that Section 264 confers wide powers to correct errors committed by assesses, including situations where a legitimate claim was not made at the time of filing the return and subsequently discovered. The court emphasized that even if details about SRO values were not disclosed in the return, revision under Section 264 was maintainable. It was concluded that the reasons for not entertaining the application under Section 264 were unjustifiable, leading to setting aside the impugned order and remitting the matter back for a fresh order.

In conclusion, the High Court set aside the impugned order disallowing the application under Section 264 and remitted the matter back to the respondent for a fresh order. The petitioner was directed to appear before the respondent without the need for a fresh notice. The court disposed of the writ petition without expressing any opinion on the merits of the case and ordered the closure of any pending miscellaneous petitions.