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TMI Blog2019 (10) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... T Act, against any order other than the order to which Section 263 applies, the revision filed by the petitioner herein within one year from the date of rejection of their rectification return, is certainly maintainable and consequently, the Commissioner ought to have exercised his power and considered the relief sought for by the petitioner and pass the order to that effect, more particularly, when he has found that the Assessee had committed the error inadvertently and that the expenditure claimed by the Assessee under the head Total Compensation to Employees is also supported by the certified copy of Profit and Loss Account . When the Commissioner is approached by the Assessee within one year from the date of an adverse order passed against the Assessee, the Commissioner is empowered and entitled to look into the grievance of the Assessee and pass such order thereon notwithstanding the fact that the Assessee has not approached the Assessing Officer within the time stipulated for filing the revised return. If such technical objection is allowed to stand in the way of the Commissioner in exercising his jurisdiction/power under Section 264, it would certainly, result in defea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Consequently, the matter is remitted back to the respondent for considering the claim of the petitioner and pass appropriate orders - W.P.No.18185 of 2019 - - - Dated:- 23-10-2019 - Mr. Justice K. Ravichandrabaabu For the Petitioner : Mr.R.Kumar For the Respondent : Mr.A.N.R.Jayapratap standing counsel for Mr.A.P.Srinivas, Senior Standing Counsel ORDER Challenge made in this writ petition is against the order of the respondent dated 18.03.2019 passed under Section 264 of the Income Tax Act, 1961 (for brevity IT Act ) relevant to the assessment year 2013-2014. 2. The case of the petitioner, in short, is as follows: The petitioner is carrying on business as manufacturer of Engineering goods. For the relevant assessment year, the petitioner filed their return on 30.09.2013 declaring total income as Nil after setting off of earlier year losses. In column No.14 of the said return of income, under the head Debits to Profit and Loss Account , compensation to Employees , the petitioner entered the figure as ₹ 1,38,59,509/- against the correct amount of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me had resulted in a demand, that the Assessee felt was flawed. The revised return of income filed on 09.01.2016 was not taken up for processing, since the revised return was filed beyond the due date provided under Section 139 of the IT Act. The remedy in the present case to the pleas of the Assessee would not lie under Section 264 of the IT Act. The logical remedy is to rectify the entries made in the return of income under the relevant columns, obviously by filing a revised return of income, for which, the time period had already been expired. The revision petition filed by the Assessee was thoroughly examined and decided on merits and in accordance with law. 4. A rejoinder is also filed by the petitioner disputing the contentions raised in the counter affidavit. 5. The learned counsel for the petitioner, after reiterating the contentions raised in the affidavit filed in support of this writ petition, further submitted as follows: The Commissioner has power under Section 264 of the IT Act, to grant the relief. The Commissioner has accepted in his order that the Assessee had committed an error inadvertently while making the entri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. For the assessment year 2013-2014, the petitioner filed their return on 30.09.2013. While filling up the columns therein, the petitioner, in Column No.14, under the head Debits to Profit and Loss Account , Compensation to Employees and Total Compensation to Employees , has entered the figure of ₹ 1,38,59,509/- , which according to the petitioner is incorrect figure and on the other hand, the actual figure towards the Total Compensation to Employees ought to have been entered is ₹ 1,87,82,244/-. The break up details is also given by the petitioner as to how such sum is arrived as follows: (i) Labour Charges ₹ 56,12,426/- (ii) Wages ₹ 75,14,652/- (iii) Salary Bonus ₹ 56,55,166/- Total ₹ 1,87,82,244/- Therefore, it is cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked the expenditures on account of labour charges at ₹ 56,12,426/-, wages at ₹ 75,14,652/- and Salary bonus at ₹ 56,55,166/-. 11. From the aforesaid it would be clear that the Assessee had committed an error, though inadvertent, for which he would be fully responsible, in its return of income which had resulted in the adoption of income by CPC at ₹ 49,22,738/- and the consequent raising of demand of tax. 11. Perusal of the above findings of the respondent would show that he in fact, found that the error committed by the Assessee was inadvertent and that the expenditure shown under the head Compensation to Employees are genuine, since such expenditures are supported by the certified copy of the Profit and Loss Account uploaded along with the return of income. However, after finding so, the respondent, though advised the Assessee to file a suitable revised return, has also made an observation that the time stipulated for filing such revised return had already expired. Thus, in effect, the respondent though found that the mistake is inadvertent and that the claim is bona fide, has not granted any relief to the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Deputy Commissioner (Appeals); or (c) where the order has been made the subject of an appeal to the 4[Principal Commissioner or Commissioner] (Appeals) or to the Appellate Tribunal. (5) Every application by an assessee for revision under this section shall be accompanied by 1[a fee of five hundred rupees]. [(6) On every application by an assessee for revision under this sub-section, made on or after the 1st day of October, 1998, an order shall be passed within one year from the end of the financial year in which such application is made by the assessee for revision. Explanation: In computing the period of limitation for the purposes of this sub-section, the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.] [(7) Notwithstanding anything contained in sub-section (6), an order in revision under subsection (6) may be passed at any time in consequence of or to give effect to any finding or direction contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no limit to exercise the jurisdiction under Section 264 of the IT Act. That was also a case in which the claim was not made by the assessee in the return or at the time of arguments when the assessment was made. In such an instance, the Division Bench held that, even assuming that the assessment order was correct, still it is open for the assessee to seek the revisional jurisdiction in respect of an item which was not made by way of a mistake. Therefore, the jurisdiction of the Commissioner to pass orders even if a revised return is not filed, is very much available. 15. In [2017] 394 ITR 247 (Mad), Sri Selvamuthukumar Vs. CIT, the Division Bench of this Court has observed at Paragraph Nos.9 13 as follows: 9. Mr. Swaminathan would refer to the judgment of the Division Bench of the Andhra Pradesh High Court in M.S. Raju Vs. Deputy Commissioner of Income Tax (MANU/AP/0956/2007 : 298 ITR 373) which has expressed a view to the effect that the import of the word 'record' as set out in the Circular (supra) would be restricted to the power under section 263 only and not section 264. The distinction noted by the Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It is also observed therein that the powers under Section 264 of the IT Act, is to enable the Commissioner to provide relief to an Assessee, where the law permits the same. 17. In [2016] 386 ITR 643 (Del.), Vijay Gupta Vs. CIT, the Division Bench of the Delhi High Court, after referring to the Circular No.14/1955 dated 11.04.1955 has observed at Paragraph Nos. 22, 35, 36 39 as follows: 22. Circular No. 14(XL-35) : MANU/DTCR/0004/1955 of 1955, dated 11.4.1955, issued by the Central Board of Direct Taxes and relied upon by the Petitioner reads as under: Officers of the department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a tax payer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the officers should take the initiative in guiding a tax payer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the department, for it would inspire confidence in him that he may be sure of getting a square deal from the department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd of the assessing officer. The commissioner instead of merely examining whether the intimation was correct based on the material then available should have examined the material in the light of the Circular No. 14(XL-35) : MANU/DTCR/0004/1955 of 1955, dated 11.4.1955 and Article 265 of the Constitution of India. The commissioner has erred in not doing so and in failing to exercise the jurisdiction vested in him on mere technical grounds. 18. Perusal of the above decisions would show that the powers conferred on the Commissioner under Section 264 of the IT Act, is not only wider in its scope and also intended for the purpose of preventing miscarriage of justice and for providing relief to an Assessee, which he is otherwise entitled to, but for the order under challenge in revision. 19. No doubt Section 139(5) provides for filing a revised return within one year for correcting any mistake. It is true that the petitioner has not exercised such option within such time. However, the petitioner filed a rectification return after receipt of intimation under Section 143(1). It is true that there is a delay in filing such return. But the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terests of administration of justice may excuse or overlook a mere irregularity or a trivial breach of law for doing real and substantial justice to the parties. The relevant observation made at Paragraph 49, is extracted hereunder: When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred and the Courts may in the larger interests of administration of justice may excuse or overlook a mere irregularity or a trivial breach of law for doing real and substantial justice to the parties and pass orders which will serve the interest of justice best. 21. Likewise, the Apex Court in [ 2013] 4 SCC 186, Union of India and others Vs. Ex-Gnr Ajeet Singh, has observed at Paragraph Nos. 24 26 as follows: 24. The expression failure of justice would appear, sometimes, as an etymological chameleon. The Court has to examine whether there is really a failure of justice or whether it is only a camouflage. Justice is a virtue which transcends all barriers. Neither the rules of procedure, nor technicalities of law can stand in its way. Eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at injustice to the Assessee. 25. Even though the Statute prescribes a time limit for getting the relief before the Assessing Officer by way of filing a revised return, in my considered view, there is no embargo on the Commissioner to exercise his power and grant the relief under Section 264 of the IT Act. In other words, for granting the relief to an Assessee, which the Commissioner finds that the Assessee is entitled to otherwise, no time restriction is provided under Section 264 of the IT Act, if such revisional jurisdiction is invoked by the Assessee by making an application under Section 264 of the IT Act. However, the Commissioner is not entitled to revise any order under Section 264 on his own motion, if the order has been made more than an year previously. Thus, it is manifest that only suo-motu power of the Commissioner under Section 264 of the IT Act, is restricted against an order passed within one year, whereas no such restriction is imposed on the Commissioner to exercise his power in respect of an order, which has been passed more than on year, if such revisional power is sought to be invoked at the instance of the Assessee by making an application un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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