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2021 (9) TMI 664 - HC - Income TaxRevision Petition filed u/s 264 of the order passed by AO u/s 270 AA(4) - Respondent No. 1, rejected Petitioner s application on the ground that Sub-Section 6 of Section 270 (AA) specifically prohibits revisionary proceedings under Section 264 of the Act against the order passed by Assessing Officer under Section 270 (AA)(4) of the Act - HELD THAT - When an assessee makes an application under Sub-Section 1 of Section 270 AA and such an application has been accepted under Sub-Section 4 of Section 270 AA, the assessee cannot file an appeal under Section 246 (A) or an application for revision under Section 264 against the order of assessment or re-assessment passed under Sub-Section 3 of Section 143 or Section 147. This does not provide for any bar or prohibition against the assessee challenging an order passed by the Assessing Officer, rejecting its application made under Sub- Section 1 of Section 270 AA. The application before Respondent No.1 was an order challenging an order of rejection passed by Respondent No. 2 of an application filed by Petitioner under Sub-Section 1 of Section 270 AA seeking grant of immunity from imposition of penalty and initiation of proceedings under Sub-Section 276( C) or Section 277 (CC). Therefore, in our view, Respondent no. 1 was not correct in rejecting the application on the ground that there is a bar under Sub-Section 6 of Section 270(AA) in filing such application. The impugned order has to be set aside and it is hereby set aside. The matter is remanded back to Respondent No. 1 to consider de-novo, the application filed by Petitioner under Section 264 impugning the order passed by the Assessing Officer under Sub-Section 4 of Section 270 AA and pass such orders as he deems fit in accordance with law after granting personal hearing to Petitioner.
Issues:
Impugning order under Section 264 of the Income Tax Act, 1961; Rejection of Revision Petition by Principal Commissioner of Income-Tax (PCIT); Application under Section 154 for rectification of assessment order; Application under Section 270 (AA) seeking immunity from penalty; Rejection of Section 270 (AA) application by Respondent No. 2; Challenge of rejection order under Section 264; Interpretation of Section 270 (AA) provisions; Correctness of rejection based on Section 270 (AA) Sub-Section 6; Setting aside the impugned order; Remanding the matter for de-novo consideration by Respondent No. 1. Analysis: The petitioner challenged an order passed by the Principal Commissioner of Income-Tax (PCIT) rejecting a Revision Petition under Section 264 of the Income Tax Act, 1961. The petitioner, engaged in manufacturing and trading, filed its return for the Assessment Year 2017-2018, leading to scrutiny assessment by the Assistant Commissioner of Income-Tax. After discrepancies in the assessment order, the petitioner sought rectification under Section 154, which was accepted, resulting in a revised tax liability. Subsequently, the petitioner applied for immunity from penalty under Section 270 (AA), which was rejected by Respondent No. 2, prompting a Section 264 application before Respondent No. 1. The rejection was based on Section 270 (AA) Sub-Section 6, barring revisionary proceedings under Section 264 after an order under Section 270 (AA)(4) has been accepted. The court analyzed Section 270 (AA) provisions, emphasizing that the bar under Sub-Section 6 does not prevent challenging the rejection of an application made under Sub-Section 1 seeking immunity from penalty. The court held that the rejection by Respondent No. 1 was incorrect, as there was no prohibition against challenging the rejection order. Consequently, the impugned order was set aside, and the matter was remanded to Respondent No. 1 for de-novo consideration of the petitioner's Section 264 application, with a directive to grant a personal hearing and request additional documents if necessary. In conclusion, the court directed Respondent No. 1 to complete the reconsideration process and issue a reasoned order within six weeks. The judgment clarified the interpretation of Section 270 (AA) and affirmed the right to challenge rejection orders under the specified provisions, ensuring due process and fair consideration in tax matters.
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