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TMI Blog2012 (9) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... he same has been claimed at Page 24 of the ROI under head 'Details of exempt Income". Therefore there is an error on the face of the order dated 7.04.2011 and the same is not sustainable. Order of CIT(A) set aside. Since petitioner's application for rectification u/s 154 filed on 8.02.2010, has not yet been disposed of, A.O. is directed to dispose off the application - Decided in favor of assessee - WRIT PETITION NO. 783 OF 2012 - - - Dated:- 7-9-2012 - S.J. VAZIFDAR AND M.S. SANKLECHA, JJ. JUDGMENT M.S. Sanklecha, J. - By this petition under Article 226 of the Constitution of India, the petitioner challenges the order dated 07.02.2011 passed by the Commissioner of Income Tax under Section 264 of the Income Tax Act, 1961 ('the Act') dismissing the petitioner's revision application. The challenge is to the failure of the Commissioner of Income Tax to exercise jurisdiction vested in her under Section 264 of the Act. 2. Brief facts leading to this petition are as under: (a) The Petitioner is a Private Limited Company. On 25.10.2007, the Petitioner electronically filed its return of income for the assessment year 2007-2008. In its return of income, the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrectly reflected on the basis of its book profit under Section 115(J)(B) of the Act as was in fact declared in the return of income as originally electronically lodged on 25.10.2007. However, the revised return of income was not taken cognizance of/processed by the respondent's electronic system, as the same was filed beyond the period of limitation as provided under section 139(5) of the Act. (e) Therefore, on 08.02.2010 the Petitioner filed an application seeking rectification under section 154 of the Act of the intimation dated 16.10.2008. The rectification was sought of the intimation under section 143(1) of the Act as the income on account of dividend and long term capital gains which were not be included in total income by virtue of section 10 of the Act were taken into account in the intimation dated 16.10.2008. No order has yet been passed on the aforesaid rectification application. (f) On 08.02.2010 itself the petitioner also filed a revision application under Section 264 of the Act with the Commissioner of Income Tax. By the revision application the petitioner sought a revision of the order in the form of intimation dated 16.10.2008 under Section 143(1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments, ledger accounts etc. furnished by the assessee during the proceedings u/s. 264 of the Act is outside the scope of section 143(1) of the Act. Hence, no such direction can be given to the A.O. to consider the various claims of the assessee for the purpose of section 143 (1) of the Act. 3. In view of foregoing, it is held that no error has occurred in processing the assessee's return u/s. 143(1) of the Act which may be required to be directed to be corrected to allow the assessee the exemptions u/s. 10(34) and u/s. 10(38) of the Act and compute the assessee's income u/s. 115JB of the Act. On perusal of the original return, it is seen that the assessee has shown long term capital gains of Rs. 6,80,194/- in Column 3(c) thereof. However, while processing the return u/s. 143(1) of the Act, it appears that tax has been charged at the rate applicable to business income. Since, there are no details of the nature of assets. In the return, the long term capital gains to show by the assessee is to be charged at the rate applicable to long term capital gains in respect of non specified assets as prescribed in section 112(1)(b) of the Act. 4. The A.O. is directed to rectify the intimat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 07.02.2011 passed by the Commissioner of Income Tax under Section 264 of the Act calls for no interference in the exercise of power under Section 264 as the intimation dated 16.10.2008 is based on the return of income filed by the petitioner itself; (b) The power under Section 264 is circumscribed by the scope of power available under Section 143(1) of the Act. In the circumstances, what could not be done by the Assessing Officer while exercising powers under Section 143(1) cannot be done by the Commissioner of Income Tax in Revision under Section 264 of the Act; (c) The power of the Commissioner under Section 264 is only restricted to the record available before the Assessing Officer which can be examined by the Commissioner either on her own motion or on application by the assessee. In the circumstances, the other evidence sought to be brought on record to establish the mistake by the assessee cannot be considered by the Commissioner under Section 264 of the Act; (d) Prior to 1999, Section 143 provided an explanation to the effect that an intimation under Section 143(1) of the Act would be considered to be an order for the purposes of Section 264 of the Act. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld always be borne in mind by the officers of the respondent-revenue while administering the said Act. 6. There is a fundamental error in the impugned order dated 7.04.2011, as it proceeds on the erroneous basis that the petitioner had admittedly not claimed the benefit of Sections 10(34) and 10(38) of the Act in respect of it's dividend income and long term capital gains on sale of shares respectively in its return of income. In fact, in the return of income, the petitioner had admittedly sought to exclude it's dividend income and long term capital gains from sale of shares under section 10 of the Act as is evident from page 24 of the return of income. However, at page 11 of the return of income as filed originally on 25.10.2005, the petitioner, by mistake, omitted to exclude the dividend income and income from long term capital gains from the total income being declared by it. We reproduce herein below, the relevant extracts: Extract at Page 11 of the Return of Income (1) Income from house property (4c of Scheduled-HP) (enter nil if loss) NIL (2) Profits and gains from business or profession ( i ) Profit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (15) 584041 Extract at Page 24 of the Return of Income Schedule EI - Details of Exempt Income (Income not to be included in Total income) (1) Interest income (1) NIL (2) Dividend income (2) 110651 (3) Long-term capital gains on which Securities Transaction Tax is paid (3) 680914 (4) Net Agriculture income(other than income to be excluded under rule 7, 7A, 7B or 8) (4) NIL (5) Share in the profit of firm/AOP etc. (5) NIL (6) Others (6) NIL (7) Total (1+2+3+4+5+6) ( 7 ) 791565 7. Therefore, in view of the above it is clear that the Commissioner of Income-tax in the order dated 7.04.2011 committed a fundamental error in proceeding on the basis that no deduction on account of dividend income and income form capital gains under Section 10 of the Act was claimed. Therefore there is an error on the face of the order dated 7.04.2011 and the same is not sustainable. 8. In view of the above, we are not considering the other submissions made and authorities cited by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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