TaxTMI 
TaxTMI 
2012 (9) TMI 803
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....ains of Rs. 6,80,914/- on sale of shares. Both the aforesaid sources of income namely dividend income and long term capital gains were not to be included in the total income under the provision of Section 10(34) and 10(38) of the Act respectively. In view of there being no profit the petitioner computed its book profit under Section 115(J)(B) of the Act at Rs. 5.84 lacs in its return of income. (b) The return of income was processed on 16.10.2008 under Section 143(1) of the Act. Consequent to the above, on 11.01.2010 an intimation under Section 143 (1) of the Act dated 16.10.2008 raising a demand of tax of Rs. 2,44,160/- was served on the petitioner. (c) The Petitioner states that it was only on 11.01.2010 when it received the intimation dated 16.10.2008 that it realized a mistake had been committed while filing its return of income electronically. On inquiry, the petitioner learnt that its Chartered Accountant's office had erred in not having claimed the exemption of dividend income and long term capital gains under Section 10(34) and 10(38) of the Act respectively while computing the return of income. It appeared that at page 11 of the return of income as filed ....
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.... original return of income sought revision of the intimation under Section 143(1) dated 16.10.2008 as the same overlooked/ignored the exemption from tax to dividend income and long term capital against under Section 10 (34) and 10 (38) of the Act respectively. This mistake in the intimation under Section 143(1) of the Act had its genesis in the inadvertent mistake by the petitioner's Chartered Accountants not having claimed the exemption while computing the income at page 11 of the return of income. This genuine mistake on the part of the Chartered Accountant's office resulted in the petitioner being liable to pay tax of Rs. 2.44 lacs when in fact the tax payable in terms of the book profit was only Rs. 59,128/-. (g) The Commissioner of Income Tax by her order dated 07.02.2011 disposed of the petitioner's Revision Application dated 08.02.2010. The relevant operative portion of the order dated 07.02.2011 of the Commissioner of Income Tax reads as under: "2............ On consideration of the assessee's petition, it is seen that:- (i) The original return was filed on 25.10.2007 and processed on 16.10.2008. As per section 139(5) of the Act, the assessee coul....
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....ly allowed." (emphasis supplied) It is the aforesaid order dated 7.02.2011 of Commissioner of Income Tax which is challenged in this petition. 3. Mr. S.M. Shah, the learned counsel for the Petitioner in support of the petition submits as under : (a) The Commissioner of Income Tax failed to exercise jurisdiction vested in her under Section 264 of the Act by having refused to consider the evidence which would establish a mistake on the part of the assessee while electronically filing its return of income. This failure to exercise her jurisdiction under section 264 of the Act is on account of having misdirected herself in law by proceeding on the basis that revisional jurisdiction is akin to an appeal and her jurisdiction is limited to that which could be exercised by the Assessing Officer under Section 143(1) of the Act; (b) The Commissioner of Income Tax acted without jurisdiction in rejecting the revision application as it was in the face of a binding Circular of Central Board of Direct Tax dated 11.04.1985 which directs the Assessing Officer not to take advantage of assessee's ignorance and mistakes. This is particularly so in view of the fact that State is....
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.....e.f. 1999 and remedy against erroneous intimation is provided under Section 154(1)(b) of the Act. This would be one more reason to support the submission that the intimation under Section 143(1) of the Act not being an order is not amenable to revisional jurisdiction under Section 264 of the Act. The appropriate remedy for the petitioner in the present circumstances would be to pursue their application for rectification under section 154 of the Act pending before the Assessing Officer. 5. In any civilized system, the assessee is bound to pay the tax which he liable under the law to the Government. The Government on the other hand is obliged to collect only that amount of tax which is legally payable by an assessee. The entire object of administration of tax is to secure the revenue for the development of the Country and not to charge assessee more tax than that which is due and payable by the assessee. It is in aforesaid circumstances that as far back as in 11/04/1955 the Central Board of Direct Tax had issued a circular directing Assessing Officer not to take advantage of assessee's ignorance and/or mistake. The relevant portion of the above Circular is as under: "3. Office....
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.... (A37 of Schedule-BP) (enter nil If loss) (2i) NIL (ii) Profit and gains from speculative (B41 of Schedule-BP) (enter nil if loss) (2ii) NIL (iii) Total (2i + 2ii) (2iii) NIL (3) Capital Gains (a) Short term (i) Short-term (under section 11A (A7 of Schedule CG) (3ai) NIL (ii) Short-term (others) (A8 of Schedule-CG) (3aii) NIL (iii) Total short-term(3ai + 3aii) (enter nil if loss) (3aiii) NIL (b) Long-term (B6 of Schedule-CG) (enter nil if loss) (3b) 680914 (c) Total expenses gains (3aiii + 3b) (3c) 680914 (4) Income from other sources (a) From sources other than from owning race horses (3 of Schedule OS) (enter nil if loss) (4a) 110651 (b) From owning race horses (4c of Schedule OS) (enter nil if loss) (4b) NIL (c) Total (a + b) (4c) 110651 (5) Total (1 + 2iii + 3xc + 4c) (5) &....