Revision under Section 264 maintainable against intimation issued under Section 143(1) of Income Tax Act

The Gujarat HC held that revision under Section 264 is maintainable against intimation issued under Section 143(1) of the Income Tax Act. The court determined that powers under Section 264 are wide-ranging, allowing correction of errors by both subordinate authorities and assessees, including situations where legitimate claims were not initially raised. The commissioner should have condoned the delay considering the circumstances, particularly the prolonged disposal time by CIT(A). Following precedent from Bombay HC, the court confirmed that Section 143(1) intimations fall within the ambit of "any orders" under Section 264, making revision applications maintainable against such intimations.

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Issues Involved:
1. Maintainability of the revision application under Section 264 of the Income-Tax Act, 1961.
2. Interpretation of "any orders" under Section 264 of the Income-Tax Act, 1961.
3. Condonation of delay in filing the revision application.

Issue-wise Detailed Analysis:

Issue 1: Maintainability of the Revision Application under Section 264 of the Income-Tax Act, 1961

The petitioner challenged the order dated 4.3.2020 passed by the Principal Commissioner of Income-Tax, Ahmedabad, which rejected the application under Section 264 of the Income-Tax Act, 1961, as not maintainable. The petitioner had filed its return of income for AY 2007-08 and claimed depreciation on goodwill resulting from a demerger. This claim was initially accepted but later disputed by the Commissioner of Income Tax under Section 263. The ITAT eventually accepted the petitioner's claim for AY 2009-10. Despite this, the respondent rejected the revision application under Section 264, leading to the present petition.

Issue 2: Interpretation of "Any Orders" under Section 264 of the Income-Tax Act, 1961

The core question was whether the intimation under Section 143(1) of the Act falls within the ambit of "any orders" as envisaged under Section 264. The court referenced its decision in Special Civil Application 14230 of 2020, which held that the powers conferred under Section 264 are very wide. It was noted that Section 264 allows for correction of errors committed by both subordinate authorities and the assessee. This includes situations where the assessee has not put forth a legitimate claim at the time of filing the return but raises it subsequently in an application under Section 264.

Issue 3: Condonation of Delay in Filing the Revision Application

The court cited the decision in EBR Enterprises v. Union of India, emphasizing that the Commissioner should adopt a liberal approach towards condoning delays to ensure substantial justice. The court held that the Commissioner has the power to condone delays and should do so to allow matters to be decided on their merits. The court also referenced the decision in Smita Rohit Gupta v. Pr. CIT, which supported the view that intimation under Section 143(1) can be subject to revision under Section 264.

Conclusion

The court concluded that the revision application under Section 264 is maintainable against the intimation sent under Section 143(1) of the Act. The impugned order dated 4.3.2020 was quashed and set aside, and the delay in filing the revision application was condoned. The matter was remanded back to the respondent to decide on its merits after giving an opportunity of hearing to the petitioner. The petitions were allowed, and no costs were ordered.

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