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TMI Blog2024 (11) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent ought to have taken into consideration this fact while deciding the revision application under section 264. As relying on Shree Rudra Technocast Private Limited [ 2024 (10) TMI 186 - GUJARAT HIGH COURT] Impugned order passed u/s 264 is hereby quashed and set aside and the matter is remanded back to the respondent to pass a fresh de novo order u/s 264 on merits while considering the fact which is not in dispute that due to technical glitch the income applied by the petitioner is not reflected in return of income in Form ITR-7 and the same is required to be taken into consideration while computing the income and the tax for the year under consideration. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE D.N.RAY Appearance: For the Petitioner(s) No. 1: Mr Jimi S Patel (10578). For the Respondent(s) No. 1: Ms Maithili D Mehta (3206). For the Respondent(s) No. 2: Notice Served. ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned advocate Mr. Jimi S. Patel for the petitioner and learned Senior Standing Counsel Ms. Maithili Mehta for the respondent. 2. Rule returnable forthwith. Learned Senior Standing Counsel Ms. Maithili Mehta w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner came to know that while uploading income tax return in XML utility, due to unknown technical glitch, amount feeded in the column of application of income at column 9(ii) of Rs. 16,09,553/- was not fetched in final return uploaded in XML Utility and hence, against the column 9(ii), the amount of application was shown as NIL and return was uploaded/filed as if the petitioner has not applied any income during the year under consideration towards the object of Trust. It is the case of the petitioner that the petitioner and his consultant failed to took note of said error at time of generation of acknowledgement of original income tax return due to the fact that in the Acknowledgement of Original Income Tax Return, amount shown as Refund due of Rs. 40,390/- and not tax payable of Rs. 4,80,470/-. 8. It is the case of the petitioner that on realisation of aforesaid mistake, the petitioner has filed rectified return through Return Data Correction Facility available on portal vide rectification request dated 01.02.2017. The aforesaid rectification request was rejected by the CPC vide order passed under section 154 dated.29.03.2017 stating that Fresh claim of Exemption/Income or oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling of return of income on 20.09.2014. It was pointed out that inspite of such fact that the petitioner had applied the income for the purpose of charitable purpose as required under the provisions of the Act, the same was not given set off by the respondent while passing the order under section 154 of the Act and therefore, the petitioner preferred a revision application. However, the same was rejected on the ground that the petitioner ought to have filed appeal challenging the intimation under section 143 (1) read with section 154 of the Act. 15. It was further pointed out that respondent has wrongly stated that the petitioner did not file Form 10B though it was uploaded by the petitioner prior to filing of the return of income. 16. It was further submitted that the petitioner being a charitable trust has been saddled with the tax though the petitioner is entitled to claim the benefit of provisions of sections 11 and 12 of the Act. 17. Reliance was placed on the decision of this Court in case of Shree Rudra Technocast Private Limited v. The Principal Commissioner of Income Tax, Rajkot (judgment dated 23.09.2024 passed in Special Civil Application No. 8472 of 2022) as well as de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be made in a rectified return. 10. I say and submit that on 16.11.2017, the assessee preferred a Revision petition before the CIT(E). The assessee was given various opportunity of being heard, before the CIT(E), wherein the assessee did not remain present nor did they submit any necessary documents. Then, on 12.03.2019, an authorized representative of the assessee appeared before the CIT(E). He exclusively relied on the Revision application filed by the assessee and failed to adduce any additional evidence proving their contention of occurrence of technical error caused. Further, the ITR-V generated and furnished by them portrayed total income computed to Rs. 18,60,180/ without including the income applied for charitable purposes, which was not sufficient evidence to prove their contention that the amount of Rs. 16,09,553/- in the column of application of income was erroneously omitted. 11. The said application was hence, rejected by the CIT(E) vide order dated 22.03.2019 on the following grounds A. The assessee failed to challenge the Assessment proceedings u/s 143 (1) and rectification order u/s 154 before the appellate authority. B. A revision application was filed after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ought to have taken into consideration this fact while deciding the revision application under section 264 of the Act. 21. This Court in case of Shree Rudra Technocast Private Limited (supra) in similar facts has held as under wherein decision of Hon ble Bombay High Court is considered: 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. As held by this court in Smita Rohit Gupta (supra), section 264 confers wide jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing 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 In Vijay Gupta v CIT Delhi-III where paragraph 35 reads as under: 35. From the various judicial pronouncements, it is settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the purpose of section 264 would be limited to such records as were available at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 agreement with the aforesaid observations and findings given by the Hon ble Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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