9911796707
TMI Blog2024 (10) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the NCLT which was not claimed by the petitioner in the original return of income. Case of Pramod R. Agraval [ 2023 (10) TMI 1142 - BOMBAY HIGH COURT] is followed by this Court in case of Jindal Worldwide Limited [ 2024 (8) TMI 1437 - GUJARAT HIGH COURT] as well as Shree Rudra Technocast Private Ltd. [ 2024 (10) TMI 186 - GUJARAT HIGH COURT] wherein, in somewhat similar circumstances, the order passed by the Principal Commissioner of Income under section 264 of the Act was quashed and set aside and the matter was remanded back for reconsideration of the claim of the petitioner which was left out in the original proceeding to be decided on merits. Adopting similar course of action, impugned order in the present case passed by the respondent No. 1 is hereby quashed and set aside and the matter is remanded back to the Principal Commissioner Surat-I respondent No. 1 to decide the revision petition filed by the petitioner under section 264 of the Act on merits after giving opportunity of hearing to petitioner. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MRS. JUSTICE MAUNA M. BHATT Appearance : For the Petitioner(s) No. 1 : Ms Vaibhavi K Parikh (3238). For the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the legitimately allowable claim/carried forward was left out to be claimed in the return of income for the year under consideration, filed application under section 264 of the Act before respondent No. 1 but by that time, the intimation under section 143 (1) of the Act dated 22.11.2022 was already issued whereby, refund due to the petitioner was determined at Rs. 18,50,310/-. 9. The petitioner therefore, by letter dated 16.02.2023 filed on 28.02.2023 approached respondent No. 1 in the application under section 264 of the Act contending inter alia as under: All the relevant facts (as discussed hereinabove) were categorically stated. Inadvertently, legitimate LTCL of Rs.32,72,77,339/-was left out to be claimed in the return of income. Section 264 uses the expression any order which implies that section is not limited to the power to correct errors committed by subordinate authorities but also cover errors committed by the assessee . Accordingly, it would also cover a situation where an assessee, because of an error, has not put forth a legitimate claim at the time of filing the return which is discovered subsequently and is raised for the first time in an application under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further submitted that the respondent No. 1 in paras 4.2 to 4.4 of the impugned order has misinterpreted provisions of section 2 (22) (d) of the Act as there is no distribution of profit on account of reduction of capital but the share capital of the company in liquidation before the NCLT under IBC was extinguished and as such, the petitioner was entitled to claim LTCG on account of extinguishment of the value of the investment as per the settled legal position. It was further submitted that the respondent No. 1 ought to have entertained the claim and adjudicate the same taking into consideration the submissions which were made by the petitioner the revision application. 15. In support of his submissions, reliance was placed on the decision of the Bombay High Court in case of Pramod R. Agrawal vs. Principal Commissioner of Income Tax reported in (2023) 156 taxmann.com 126 as well as decision of this Court in case of C. Parikh Co. vs. Commissioner of Income Tax reported in [1980] ITR 610 (Guj). 16. On the other hand, learned Senior Standing Counsel Mr. Karan Sanghani for the respondent No. 1 submitted that the respondent No. 1 has rightly rejected the revision application under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents in support of the claim of loss on account of extinguishment of the shares of the company in liquidation. 20. Having heard Learned advocates for the respective parties and considering the facts of the case it is apparent that the petitioner has not claimed LTCG on extinguishment arising on account of loss arising on account of extinguishment of shares of Garden Silk value of shares of Garden silk pursuant to order dated 01.01.2021 passed by the NCLT. Respondent No. 1 is however supposed to consider merits of the case while entertaining revision petition filed by the petitioner under section 264 of the Act and it is not in dispute that the petitioner has availed the remedy of revision within the prescribed period of limitation and the respondent therefore ought to have considered the claim of the petitioner for loss on account of extinguishment of the value of shares in the investment of shares of Garden as per the order passed by the NCLT which was not claimed by the petitioner in the original return of income. The Hon ble Bombay High Court in case of Pramod R. Agraval (supra) has considered the scope of power under section 264 of the Act as under: 12 In Asmita Damle (Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtended 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 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. Before passing any order, personal hearing shall be given, notice whereof shall be given atleast 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. 21. The aforesaid decision of the Bombay high Court is followed by this Court in case of Jindal Worldwide Limited vs. The Principal Commissioner of Income Tax in Special Civil Application No. 14230/0020 as well as in case of Shree Rudra Technocast Private Ltd vs. The Principal Commissioner of Income Tax, Rajkot and anr in Special Civil Application No. 8472 of 2022 wherein, in somewhat similar circumstances, the order passed by the Principal Commissioner of Income under section 264 of the Act was quashed and set aside and the matter was remanded back for reconsideration of the claim of the petitioner which was left out in the original proceeding to be decided on merits. Adopting similar course of action, impugned order dated 30.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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