Court Overturns Previous Orders, Mandates Reconsideration with Fair Hearing and Compliance by Respondent.

The Bombay HC quashed the previous orders and remanded the case for reconsideration, instructing the respondent to issue a reasoned order by a specified date. The petitioner is entitled to a personal hearing and must receive advance notice of any inquiry. The respondent must ensure compliance with procedural fairness.

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Issues:
The judgment involves issues related to the incorrect details declared by the petitioner in the return of income for Assessment Year 2013-2014, the rejection of the application under Section 264 of the Income Tax Act, 1961, and the subsequent rejection of the application under Section 154 of the Act.

Summary:

1. The petitioner, an individual, mistakenly filled the details of income for Assessment Year 2014-2015 in the return of income for Assessment Year 2013-2014. The respondent raised a demand for tax payable after processing the return, not granting credit for legitimate tax credit. The petitioner then filed a correct return for Assessment Year 2014-2015.

2. The petitioner filed an application under Section 264 of the Act, which was rejected on the grounds that the intimation under Section 143(1) is not an order. A subsequent application under Section 154 of the Act was also rejected. The petitioner challenged both orders and the communication dated 17th October 2015.

3. The respondent admitted that the intimation under Section 143(1) was subject to revision under Section 264 but rejected the application on merits, stating that the change in figures would disturb the sanctity of the return. The determination of total income involves deep scrutiny and cannot be merely substituted by the figures claimed by the assessee.

4. The power conferred under Section 264 is wide, allowing the Commissioner to correct errors committed by subordinate authorities or assesses. The Commissioner is duty-bound to apply his mind to the application and make inquiries as necessary.

5. The court quashed the previous orders and remanded the matter for denovo consideration to the respondent. The respondent was directed to pass a reasoned order, giving the petitioner a personal hearing and communicating the notice in advance.

6. The final order was to be passed by a specified date, with the petitioner given the opportunity to provide clarification/explanation during any inquiry conducted by the Assessing Officer.

Judgment:
The High Court of Bombay quashed the previous orders, remanding the matter for reconsideration, and directed the respondent to pass a reasoned order by a specified date, ensuring the petitioner's right to a personal hearing and advance notice of any inquiry.

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