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TMI Blog2024 (10) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... t has to ensure that there is relief provided to assessee where the law permits the same. We see no reason to take a different view on the interpretation of the word 'record' occurring in section 264 of the Act from that expressed by the Central Board of Direct Taxes in the Circular extracted above. The order under section 144A dated 31-12-2007 is thus part of the record and ought to have been take into consideration in deciding the petition under section 264 Thus, impugned order passed by respondent No. 1 u/s 264 as well as the order under Section 154 of the Act are hereby quashed and set aside and the matter is remanded back to the Principal Commissioner Respondent No. 1 to decide the revision petition filed by the petitioner under Section 264 on merits. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MRS. JUSTICE MAUNA M. BHATT Appearance : For the Petitioner(s) No. 1 : Mr Tushar Hemani, Senior Advocate for Ms Vaibhavi K Parikh (3238). For the Respondent(s) No. 1,2 : Mr Karan G Sanghani (7945). ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned Senior Counsel Mr. Tushar Hemani, with learned advocate Ms. Vaibhavi Parikh, for the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee neither received share application money nor issued any share capital and the amount of Rs. 80 lakhs is carried forward of the last year balance that is for A.Y. 2015-2016. 5.4. The respondent No. 1 however, without considering the submissions of the assessee rejected the application filed by the assessee under Section 264 of the Act and observed as under: 6. I have carefully considered the relevant facts related to this case. It is fact that during the assessment proceedings proper opportunity of being heard have been given to the assessee by the AO. The only plea of the assessee is that due to illness and subsequent death of one of the director proper compliance could not be made. However, this submissions was not be sufficient to justify action u/s 264 of the I.T. Act. The assessee is a corporate entity, assisted by qualified CA s for proceedings. Therefore, prima facie I do not find any merit in the application of the assessee and accordingly the same is rejected. 5.5. The petitioner-assessee thereafter, preferred application under Section 164 for rectification of the mistake committed while passing the order under Section 264 of the Act on the ground that it is mistake a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for scrutiny and the assessment order was passed under Section 144 of the Act and Rs. 80 lakhs were added on account of share premium received by the assessee during the year for which the petitioner has not offered any explanation. It is submitted that Commissioner has relied upon such report and accordingly, rightly rejected the petition under Section 264 of the Act. 8. Having heard the learned advocates for the respective parties and considering the facts of the case, it is a trite law to the effect that Commissioner of Income-Tax is supposed to consider the merits of the case while entertaining the petition filed by the assessee under Section 264 of the Act. It is not in dispute that the assessee has availed the remedy of revision instead of filing of appeal as per his choice of the assessee and the Commissioner was therefore, duty bound to consider such revision petition on merits. 9. The Hon ble Bombay High Court in case of Pamod R. Agrawal (supra) has considered the scope of powers under Section 264 of the Act as under: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer could be granted by the Commissioner under section 264. Before allowing such deduction 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 n Vijay Gupta v CIT Delhi-III where paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse adopted by the petitioner in the facts and circumstances of the present case was valid. 13. In Selvamuthu Kumar (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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax v. Sri. Manjunathesware Packing Products and Camphor Works (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resh Kumar submitted that assessee should produce documents to prove his share of the indexed renovation expenses of Rs. 2,95,859/-. In our view, it is not required because in the assessment order dated 30th December 2010 passed under section 143(3) of the Act in the case of Ravi R Agarwal, the other co-owner of the flat, the Assessing Officer has accepted the amount of Rs. 2,95,859/- as the cost of renovation of indexation. Therefore, this figure has to be accepted as correct and suitable allowance should be made while arriving at the long-term capital gain. 15. In the circumstances, we hereby quash and set aside the impugned order dated 22nd March 2017 and remand the matter to respondent No. 1 for de novo consideration. Before passing any order, personal hearing shall be given, notice whereof shall be given at least five working days in advance. The order to be passed shall be a reasoned order dealing with all submissions of assessee. The application under section 264 of the Act shall be disposed within 8 weeks from today. Mr. Gandhi assures the court that so long as five working days notice is given, petitioner shall not seek any adjournment on any ground. 10. We are in agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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