2023 (9) TMI 159 - HC - Income Tax

Revision u/s 264 - Determination of income of assessee - While filing the ITR form, petitioner mistook the assessment year to be financial year and all the details of income for Assessment Year 2014-2015 were filled in the return of income for Assessment Year 2013-2014 - respondent no 1 rejected petitioner s application on merits because according to him, the assessee had sought a revision on some fact which was indisputably apparent from record - HELD THAT - As the power conferred u/s 264 of the Act is very wide, in our view, the Commissioner is duty bound to apply his mind to the application filed by the assessee and pass such order thereon. Section 264 of the Act also empowers respondent no. 1 to call for the record of any proceedings under the Act in which any order has been passed and make such inquiry or cause such inquiry to be made and pass such order as he thinks fit. Therefore, if respondent no. 1 feels that detailed inquiry is necessary and he will be hard pressed for time, he may cause such inquiry made by the AO and direct the AO to file a report. In the present case, as per petitioner in his return of income he has made mistakes as noted earlier in this order. Looking at the mistake, it is rather obvious that it was not a deliberate mistake or an attempt to gain some unfair advantage or to evade any tax. In the circumstances, we quash and set aside the order passed under Section 264, order under Section 154 of the Act and intimation issued under Section 143(1) and remand the matter for denovo consideration to respondent no. 1 to dispose petitioner s application under Section 264 of the Act on merits.

Summary

Issues:
The judgment involves issues related to the incorrect details declared by the petitioner in the return of income for Assessment Year 2013-2014, the rejection of the application under Section 264 of the Income Tax Act, 1961, and the subsequent rejection of the application under Section 154 of the Act.

Summary:

1. The petitioner, an individual, mistakenly filled the details of income for Assessment Year 2014-2015 in the return of income for Assessment Year 2013-2014. The respondent raised a demand for tax payable after processing the return, not granting credit for legitimate tax credit. The petitioner then filed a correct return for Assessment Year 2014-2015.

2. The petitioner filed an application under Section 264 of the Act, which was rejected on the grounds that the intimation under Section 143(1) is not an order. A subsequent application under Section 154 of the Act was also rejected. The petitioner challenged both orders and the communication dated 17th October 2015.

3. The respondent admitted that the intimation under Section 143(1) was subject to revision under Section 264 but rejected the application on merits, stating that the change in figures would disturb the sanctity of the return. The determination of total income involves deep scrutiny and cannot be merely substituted by the figures claimed by the assessee.

4. The power conferred under Section 264 is wide, allowing the Commissioner to correct errors committed by subordinate authorities or assesses. The Commissioner is duty-bound to apply his mind to the application and make inquiries as necessary.

5. The court quashed the previous orders and remanded the matter for denovo consideration to the respondent. The respondent was directed to pass a reasoned order, giving the petitioner a personal hearing and communicating the notice in advance.

6. The final order was to be passed by a specified date, with the petitioner given the opportunity to provide clarification/explanation during any inquiry conducted by the Assessing Officer.

Judgment:
The High Court of Bombay quashed the previous orders, remanding the matter for reconsideration, and directed the respondent to pass a reasoned order by a specified date, ensuring the petitioner's right to a personal hearing and advance notice of any inquiry.