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TMI Blog2023 (10) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income, petitioner had offered Rs. 8,83,763/- as capital gain arising from the sale of the said flat. The said figure was arrived at without considering the allowance of indexed cost of improvement in respect of renovation expenses incurred in September 1990 amounting to Rs. 2,95,859/-. 3. Petitioner's return was selected for scrutiny and in the assessment proceedings vide order dated 30th November 2009, addition under Section 50C of the Act was made by respondent no. 3 (the assessing officer) by taking the stamp duty value as full value of consideration while computing the capital gains arising from the sale of the said flat to the extent of Rs. 6,05,765/-. No adjustment was made to the allowances claimed from the full value of consideration to determine the capital gains. An appeal was filed before the Commissioner of Income Tax (Appeals) (CIT). The ex-parte order that came to be passed on 21st September 2010 directed respondent no. 3 to refer the property for valuation to the Department's Valuation Officer under Section 50C(2) of the Act and then decide the issue in light of the valuation available in accordance with the provision of Section 50C of the Act. 4. Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed in the original return of income and the same should be allowed as it was rectifiable defect under Section 154 of the Act.. 7. This application of petitioner was rejected by respondent no. 3 by an order dated 8th December 2015. The rejection was on the ground that such claim was made first time in the application under Section 154 of the Act and it was never brought to the notice of respondent no. 3 earlier or CIT(A). Aggrieved by the said order of respondent no. 3 passed under Section 154 of the Act petitioner filed the application under Section 264 of the Act before respondent no. 1. Petitioner elaborately explained its case and the same came to be rejected by an order dated 22nd March 2017, which is impugned in this petition. 8. Mr. Gandhi submitted that the impugned order requires to be quashed and set aside and the matter be remanded to respondent no. 1 because respondent no. 1 has not really appreciated the scope of Section 264 of the Act. Mr. Gandhi submitted that Section 264 of the Act confers wide jurisdiction on the commissioner and proceedings under Section 264 are intended to meet the situation faced by an aggrieved assessee who is unable to approach the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act was passed. Therefore, the assessing officer was correct in rejecting the application filed by assessee under Section 154 of the Act. Moreover, since assessee had already filed an appeal against the assessment order, assessee could not have filed an application under Section 264 of the Act. Further, the application under Section 264 of the Act was filed more than one year after the order under Section 143(3) of the Act was passed and, therefore, there was no infirmity in the order impugned in this petition. 10. We would agree with Mr. Gandhi that there was no delay in filing the application under Section 264 of the Act because the application under Section 264 of the Act was against the order passed under Section 154 of the Act and not Section 143(3) of the Act. The order under Section 154 of the Act was passed on 8th December 2015 and the application under Section 264 of the Act was filed on 18th January 2016, within one year. 11. The other submission of Mr. Suresh Kumar also cannot be accepted in view of the wide powers conferred on respondent no. 1 under Section 264 of the Act. As held by this court in Smita Gupta (Supra), Section 264 confers wide jurisdiction on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction if any further enquiry was required to be done, the Commissioner could have either himself enquired or directed the Assessing Officer to do the needful. However, the Commissioner has declined to exercise power under Section 264 because of amendment to Section 143(1) by Finance Act, 1999. Powers of the Assessing Officer to make prima facie adjustments under Section 143(1), done away with by Finance Act, 1999 (with effect from 1st June, 1999) does not in any way effect the right of the Commissioner under Section 265 of the Act to grant relief to assessee if available to assessee as per the decision of the Apex Court. Exercise of powers under Section 264 is not subject to the power of the Assessing Officer to make adjustments under Section 143(1) of the Income-tax Act. Therefore, relief can be granted to assessee under Section 264 even if the power of adjustment under Section 143(1) is taken away from the Assessing Officer." (emphasis supplied) 8. Section 264 of the Act also came up for consideration before the Hon'ble Delhi High Court in Vijay Gupta v CIT Delhi-III 3 where paragraph 35 reads as under: "35. From the various judicial pronouncements, it is settled th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances of the present case was valid." 13. In Selvamuthukumar (Supra) paragraphs 6 to 11 and 13 read as under: "6. The language of section 264 provides ample powers to the Commissioner of Income Tax to make or cause such inquiry to be made as he thinks fit in dealing with an application for Revision under section 264. This would include taking into consideration relevant material that would have a bearing on the issue for consideration, which, in this case, includes the order under section 144A of the Act dated 31.12.2007. 7. Mr. Swaminathan would object on the ground that the inquiry contemplated under section 264 is restricted to the record of any proceeding under this Act and has, necessarily to refer to the specific assessee alone. He would also refer to Section 263 dealing with revision of orders prejudicial to the revenue and to the explanation thereto wherein 'Record' is defined as being all records relating to any proceeding under this Act available at the time of examination by the Principal Commissioner or Commissioner. In the absence of such definition in section 264, he would urge that 'record' for the purpose of section 264 would be limited to such records as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (231 ITR 53), wherein the Supreme Court, while considering the import of the word 'record' in section 263 of the Act states as follows:- 'If the material, which was not available to the Income-tax Officer when he made the assessment could thus be taken into consideration by the CIT after holding an enquiry, there is no reason why the material which had already come on record though subsequently to the making of the assessment cannot be taken into consideration by him.' 9. The view of the department as reflected in the above Circular is thus to the effect that what constitutes 'record' cannot be limited to the return of income or order of assessment, but should be extended to include information from other sources that would impact the issue in question. 10. Mr. Swaminathan would refer to the judgment of the Division Bench of the Andhra Pradesh High Court in M.S Raju v. Deputy Commissioner of Income Tax (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 Division Bench in that case was that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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