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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 ..... 264 of the Act was against the order passed u/s 154 of the Act and not Section 143(3) - 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. The proceedings under Section 264 of the Act are intended to meet a situation faced by an aggrieved assessee, who is unable to approach the Appellate Authorities for relief and has no other alternate remedy available under the Act. The Commissioner is bound to apply his mind to the question whether petitioner was taxable on that income and his powers are not limited to correct the error committed by the subordinate authorities but could even be exercised where errors are committed by assessee. It would even cover situation where assessee because of an error has not put forth legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time in an application under Section 264. In Asmita Damle [ 2014 (5) TMI 1230 - BOMBAY HIGH COURT] also held that the Commissioner while exercising revisionary powers u/s 264 has to ensure that there is relief provided to assessee where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Respondent no. 3 referred the matter to Department s Valuation Officer who, in his report dated 23rd May 2011 ascertained the fair market value to be Rs. 1,57,21,000/- as against the stamp duty value of Rs. 1,69,23,060/-. Accordingly, a relief of Rs. 3,00,515/- was granted to petitioner. Against the order giving effect to the order of the CIT(A), petitioner preferred another appeal before the CIT(A) disputing the value of flat as arrived at by Department s Valuation Officer. This appeal came to be dismissed by the CIT(A) by an order dated 13th August 2013. It is petitioner s case that petitioner was not aware about the appeal having been dismissed for default and only when petitioner recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 appellate authority for relief and has no other alternate remedy available under the Act. Mr. Gandhi submitted that even though there might be an embargo on the assessing officer, there is no such embargo on the power of the appellate authority or as in the case of revisional authority. Mr. Gandhi submitted that the power under Section 264 of the Act is intended to prevent miscarriage of justice and courts have consistently taken a view that conferment of the powers under Section 264 of the Act is to enable the Commissioner to provide relief to assessee, where the law permits the same. This power would even cover the situation, where assessee because of error has not put forth a legitimate clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst 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 the Commissioner. The proceedings under Section 264 of the Act are intended to meet a situation faced by an aggrieved assessee, who is unable to approach the Appellate Authorities for relief and has no other alternate remedy available under the Act. The Commissioner is bound to apply his mind to the question whether petitioner was taxable on that income and his powers are not limited to correct the error committed by the subordinate authorities but could even be exercised where errors are committed by assessee. It would even cover situation where assessee because of an error has not put forth legitimate claim at the time of filing the return and the error is subsequently discovered and is raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 that the powers conferred under Section 264 of the Act are very wide. The Commissioner is bound to apply his mind to the question whether the petitioner was taxable on that income. Since Section 264 uses the expression any order , it would imply that the section does not limit the power to correct errors committed by the subordinate authorities but could even be exercised where errors are committed by assessees. It would even cover situations where assessee because of an error has not put forth a legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time in an application under Section 264. (emphasis supplied) 12. In Asmita Damle (Supra) also the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 were available at the time of assessment. We are not impressed with the distinction. The necessity for the insertion of a definition of record by the Finance Act 1988 has been explained in a Circular issued by the Central Board of Direct Taxes No. 528 dated 16.12.1998 to the following effect. 39.1 Under the existing provisions of section 263 of the Income-tax Act, the Commissioner of Income-tax is empowered to call for and examine the record of any proceeding and if he considers that the order passed by the Assessing Officer is erroneous insofar as it is prejudicial to the interest of revenue, he may pass an order enhancing or modifying the assessment or cancelling the same with a direction to make it afresh. The provisions as presently worde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inathan 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 power of revision under section 263 of the Act was intended to be exercised in cases where the interests of revenue were prejudiced and it was for this reason that the inquiry of the Commissioner of Income Tax was not limited only to material available before the assessing officer, but also material obtained subsequently. The power under section 264 of the Act is, in fact as wide a power, and one that is intended to prevent miscarriage of justice. Courts have consistently taken a view that the conferment of powers under section 264 of the Act is to enable the Commissioner to provide relief to an assessee, where the law permits the same. Reference may be made to the decisions of the Gujarat High Court in C. Parikh and Co. v. Commissioner of Income Tax (122 ITR 610); Ramdev Expor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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