2017 (1) TMI 1264 - HC - Income Tax

Intimation under Section 143(1) is an order for revision under Section 264

The court held that an intimation under Section 143(1) of the Income Tax Act is considered an order for the purpose of revision under Section 264. The ... Revision u/s 264 in favor of assessee - scope of revisional power of the Commissioner under Section 264 - Held that:- A mere intimation does not amount to an order which could be revised under Section 264. In Parekh Brothers (1983 (8) TMI 17 - KERALA High Court ), the question which was considered was whether Section 264 can be invoked for the purpose of making a claim of deduction under Section 35B. The argument that independent of the notice issued under Section 143(1)(a), if there is failure on the part of the petitioner in making a claim for deduction, whether it is possible for the Commissioner to grant one more opportunity in the matter. It is settled law that the revisional powers are very wide. Petitioner is now faced with a demand which according to the petitioner is liable to be reduced on specific reasons. In Parekh Brothers (supra), this Court held that even if no such claim has been made earlier, such a claim can be entertained by the Commissioner under Section 264. Viewed in that angle, it is of the view that though not as a challenge to Section 143(1) notice, when the petitioner has filed a revised return and has sought for interference by the Commissioner, necessarily the claim has to be considered in accordance with law. Thus taking cue from Parekh Brothers (supra), the Commissioner will be justified in considering the claim for deduction by the petitioner in accordance with law under Section 264 of the Act. Issues Involved:1. Whether an intimation under Section 143(1) of the Income Tax Act, 1961 amounts to an order that can be revised under Section 264.2. Whether the Commissioner of Income Tax has the jurisdiction to entertain a revision petition under Section 264 for claims not made earlier by the assessee.Issue-wise Detailed Analysis:1. Intimation under Section 143(1) as an Order for Revision under Section 264:The petitioner, a registered society, filed a return for the assessment year 2013-14. An intimation under Section 143(1) disallowed certain expenses due to the lack of registration under Section 12A, resulting in a tax liability. The petitioner filed a revision petition under Section 264, which was dismissed by the Principal Commissioner of Income Tax, Kochi, on the grounds that an intimation under Section 143(1) is not an order for the purposes of Section 264.The court reviewed several judgments:- Parekh Brothers v. Commissioner of Income Tax: It was held that the Commissioner has jurisdiction to entertain a revision under Section 264 even if the mistake was committed by the assessee and detected post-assessment.- S.R. Koshti v. Commissioner of Income Tax: The Gujarat High Court held that an intimation under Section 143(1) is not an order of assessment, but the Commissioner can correct the assessment under Section 264 if over-assessment is shown.- Manoharlal Agarwal v. Commissioner of Income Tax: The Gujarat High Court held that a revised return filed within time entitles the petitioner to a refund, and the intimation under Section 143(1) can be revised under Section 264.- Assam Roofing Ltd. v. Commissioner of Income Tax: The Gauhati High Court held that an intimation under Section 143(1) can be revised under Section 264.- Vijay Gupta v. Commissioner of Income Tax: The Delhi High Court held that an intimation under Section 143(1) is regarded as an order for the purpose of Section 264.- Larsen and Toubro Ltd v. Asst. Commissioner of Income Tax: The Bombay High Court held that rejection of an application under Section 197 amounts to an order and can be revised under Section 264.Contrary to these, the revenue cited:- Commissioner of Income Tax v. K.V. Mankaram and Company: The Kerala High Court held that an intimation under Section 143(1)(a) is not an order of assessment but can be treated as an order for the limited purpose of Sections 246 and 264.- Asst. Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers Private Ltd: The Supreme Court held that an intimation under Section 143(1)(a) cannot be treated as an order of assessment, but it is deemed to be an order for the purpose of Section 264 between specific periods.2. Jurisdiction of Commissioner under Section 264:The court analyzed whether the Commissioner can entertain a revision petition under Section 264 for claims not made earlier by the assessee. It was noted that:- Parekh Brothers v. Commissioner of Income Tax: The court held that the Commissioner can entertain a revision petition under Section 264 even if the claim was not made earlier.- The court emphasized that the revisional powers under Section 264 are very wide and can be invoked to correct any over-assessment or to entertain new claims for deductions.Conclusion:The court concluded that the Commissioner of Income Tax has the jurisdiction to consider the revision petition under Section 264 even if it pertains to an intimation under Section 143(1). The court set aside the impugned order (Ext.P1) and directed the Commissioner to reconsider the matter in accordance with law within three months, after hearing the petitioner.Disposition:(i) Ext.P1 is set aside.(ii) The Commissioner of Income Tax is directed to reconsider the matter in accordance with law. This shall be completed within a period of three months from the date of receipt of a copy of this judgment after hearing the petitioner.