Court orders inclusion of omitted dividends in non-resident company's income, refund of super-tax

The High Court quashed the Commissioner of Income-tax's order dismissing the revision petition filed by a non-resident company seeking inclusion of omitted dividends in its income and refund of super-tax. The Court held that the Commissioner failed to consider the petitioner's inadvertent omission and wrongly denied the refund. Emphasizing the duty to assess and revise if necessary, the Court found the Commissioner's decision erroneous and directed a fresh disposal of the revision petition in accordance with the law, with parties bearing their own costs.

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Issues:
Petition to quash income-tax authorities' orders and seek refund of tax; Refusal to reopen assessment by Income-tax Officer; Rejection of refund claim by Income-tax Officer; Dismissal of revision petition by Commissioner of Income-tax; Interpretation of scope of revision under section 264.

Analysis:
The petitioner, a non-resident company holding shares in Indian companies, received dividends during the relevant assessment year. The petitioner omitted to include an interim dividend of Rs. 2,30,000 in its return for the assessment year 1965-66, leading to the Income-tax Officer not considering the gross dividend and deductions towards income-tax and super-tax. The petitioner sought a refund of Rs. 11,500 deducted as super-tax, as per the Finance Act, 1965. The Income-tax Officer declined to reopen the assessment despite the petitioner's request, leading to a series of unsuccessful appeals.

The petitioner then filed a revision petition under section 264 of the Income-tax Act, 1961, before the Commissioner of Income-tax seeking inclusion of the omitted dividend in its income and refund of the super-tax. The Commissioner dismissed the revision petition, stating no mistake in the Income-tax Officer's order. The High Court observed that the Commissioner took a narrow view of the revision scope, failing to consider the petitioner's inadvertent omission and consequent refund denial.

Referring to a previous judgment, the High Court emphasized the Commissioner's duty to assess the petitioner's plea and revise the assessment if necessary. The court found the Commissioner's order erroneous and quashed it. The High Court allowed the petition, quashed the Commissioner's order, and directed a fresh disposal of the revision petition in accordance with the law. The parties were directed to bear their own costs in the petition.

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