Revisional Authority Can Correct Assessee's Genuine Errors Under Section 264 Even After Section 143(1) Time Limit

The HC held that the revisional authority under s. 264 is competent to correct bona fide errors committed by the assessee in the return, even if the time for rectification under s. 143(1) has expired. The authority erred in refusing to consider the alteration return filed by the assessee solely because the return particulars could not be altered by anyone other than the assessee. The court distinguished prior SC precedent, noting it did not address s. 264's scope to correct assessee errors. The matter was remanded for fresh consideration by the appropriate authority in light of these observations.

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ISSUES:

Whether the revisional authority under Section 264 of the Income Tax Act, 1961 is competent to correct a bona fide mistake committed by an assessee in the originally filed return.Whether a return filed in ITR-6 form can be altered by any person other than the assessee himself.Whether the principles laid down in the Supreme Court judgment in Goetze (India) Ltd. restrict the revisional authority's power under Section 264 to rectify errors in the return.

RULINGS / HOLDINGS:

The revisional authority under Section 264 of the Income Tax Act, 1961 is competent to correct an error committed by the assessee in the return, including bona fide mistakes, and can effect appropriate rectification of the return filed in ITR-6 form.The return filed in ITR-6 form cannot be altered by any person other than the assessee himself; however, the revisional authority may exercise jurisdiction to correct mistakes made by the assessee.The Supreme Court judgment in Goetze (India) Ltd. does not preclude the revisional authority from exercising powers under Section 264 to rectify errors committed by the assessee, as the issue of correction by revisional authority was not directly considered in that case.

RATIONALE:

The Court applied the statutory framework of Section 264 of the Income Tax Act, 1961, which confers revisional powers to the Commissioner to modify or cancel any order passed by the Assessing Officer if it is erroneous or prejudicial to the interests of revenue.Precedents from various High Courts, including the judgment in Ena Chaudhuri, were relied upon to establish that Section 264 jurisdiction can be exercised to rectify bona fide mistakes by the assessee in the return, even after the time for filing a revised return has expired.The Supreme Court decision in Goetze (India) Ltd. was distinguished on the ground that it dealt with the power of the Assessing Officer and the Income Tax Appellate Tribunal in relation to claims for deductions, and did not address the revisional jurisdiction under Section 264 to correct errors in the return.The Court identified a misinterpretation and misconstruction of the scope of Section 264 jurisdiction by the revisional authority, which equated it with the Assessing Officer's jurisdiction to allow claims only through revised returns.Accordingly, the Court set aside the impugned order and remanded the matter to the appropriate authority for fresh consideration in light of these principles.

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