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Issues: (i) Whether the Principal Commissioner of Income Tax validly invoked and exercised revisionary jurisdiction under Section 263 of the Income-tax Act, 1961 to direct re-computation of tax under Section 115BBE; (ii) Whether the delay in filing the appeal to the Tribunal should be condoned.
Issue (i): Whether the invocation of Section 263 was justified to direct computation of tax under Section 115BBE instead of treating the tax computation error as rectifiable under Section 154.
Analysis: The Assessing Officer made additions under statutory provisions including Section 68 and assessed income accordingly. The Principal Commissioner issued a revisionary order under Section 263 directing tax computation under Section 115BBE on the basis that documentary evidence for cash deposits and gifts was not furnished and that the assessment was erroneous and prejudicial. The material demonstrates that the additions and their factual basis were part of the assessment process and that the alleged error related to the mode of computation of tax (application of Section 115BBE) rather than an order shown to be erroneous and prejudicial in the sense envisaged by Section 263. The error in tax computation is of the class that can be corrected under the statutory rectification mechanism in Section 154 rather than by exercise of the revisional jurisdiction under Section 263.
Conclusion: Invocation and exercise of Section 263 to direct re-calculation of tax under Section 115BBE is not justified; the defect identified is rectifiable under Section 154 and does not sustain a Section 263 revision. This issue is decided in favour of the assessee.
Issue (ii): Whether the Tribunal should condone the delay of 451 days in filing the appeal.
Analysis: A substantial portion of the delay occurred during the Covid-19 lockdown period declared by the Government of India. The delay is attributable to circumstances arising from the pandemic and the assessee is not held personally responsible for the entire period of delay.
Conclusion: The delay in filing the appeal is condoned. This issue is decided in favour of the assessee.
Final Conclusion: The appeal is allowed; the revisionary order passed under Section 263 is quashed and the delay in filing the appeal is condoned.
Ratio Decidendi: A mistake confined to incorrect computation of tax (including application of Section 115BBE) is a matter for rectification under Section 154 and does not convert an assessment order into one that is erroneous and prejudicial so as to justify exercise of revisionary powers under Section 263.
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