TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 143
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....1997-98 in the sum of Rs. 2,50,00,000. 3. However, since the relevant notification giving effect to the Pay Commission recommendations was issued only on 4th March 1998, the Assessing Officer ('AO') disallowed in AY 1997-98 the claim in respect of the revised salary. This disallowance was upheld by the CIT(A) in AY 1997-98 confirming the action of the AO on the ground that the notification dated 4th March 1998 was relevant to AY 1998-99. Significantly, the CIT(A) observed that the claim could be considered in AY 1998-99. However, by the time the order of the CIT(A) was issued, the assessment for AY 1998-99 was complete, and in the return filed for the said AY, no claim for provision for arrears of wages was made. 4. To complete this narration it must be noticed that on 26th November 1998 the Petitioner filed its return of income for the AY 1998-99 declaring a total income of Rs. 23,50,62,778. 5. On 14th March 2001, the assessment order for the AY 1998-99 was made by the AO under Section 143(3) of the Act at the total income of Rs. 23,95,62,720. On 21st March 2001, the Petitioner made an application under Section 154 of the Act before the AO for allowing the deduction in respect ....
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.... should be considered on its merits having regard to the peculiar facts and circumstances of this case and the fact that the appellant pursued a wrong remedy for the period from 2001 till date, if the appellant approaches the CIT under Section 264 within a month. Liberty to file an application under Section 264 is granted. The appeal is disposed of in the above terms." 9. On the basis of the above observations, the Petitioner filed an application before the CIT(A) under Section 264 of the Act on 27th September 2012. The Additional CIT Range-15 in a report dated 5th February 2014 stated that there was no dispute about the genuineness of the claim and that there was no loss of revenue. 10. By the impugned order dated 24th March 2014, the CIT(A) rejected the application filed by the Petitioner under Section 264 of the Act. The CIT(A) held that the Petitioner had not claimed the deduction in respect of provision for wage arrears by revising the return for AY 1998-99. Therefore, the issue did not emanate from the assessment order. A reference was made by the CIT(A) again to the decision of the Supreme Court in Goetze India (supra) and the order dated 17th October 2012 of the Orissa Hi....
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..... 14. Mr. Shivpuri, on the other hand, submitted that Section 264 was not applicable in the case where the assessment order had been the subject matter of an appeal before the ITAT. Reliance was placed on the decision in Hindustan Aeronautics Limited v. CIT (2000) 243 ITR 808 (SC). It was further submitted that there is no provision in the Act which allows the entertaining of a fresh claim for deduction not made by the Assessee in the original return or even by filing a revised return. Reliance was again placed on the decision in Goetze (India) Limited (supra). He submitted that the CIT was bound to function within the frame work of the statute. He cannot indirectly permit that which cannot be permitted directly in the revisionary jurisdiction in the facts and circumstances of the case. Reliance was placed on the decision in Orissa Rural Housing Development Corporation (supra). 15. The above submissions have been considered. As regards the preliminary objection on the maintainability of the present petition under Article 226 of the Constitution when the remedy of challenging the decision of the AO by way of an appeal has been exhausted, the Court is of the view that the Petitione....
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....ay pass such order as he thinks fit which is not prejudicial to the Assessee. There is nothing in s. 264 which places any restriction on the Commissioner's revisional power to give relief to the Assessee in a case where the Assessee detracts mistakes on account of which he was over-assessed after the assessment was completed. We do not read any such embargo in the Commissioner's power as read by the Commissioner in the present case. It is open to the Commissioner to entertain even a new ground not urged before the lower authorities while exercising revisional powers. Therefore, though the petitioner had not raised the grounds regarding under-totalling of purchases before the ITO, it was within the power of the Commissioner of admit such a ground in revision." 18. Likewise, the Kerala High Court in Parekh Brothers v. CIT (supra) observed: "We hold, that even though a mistake was committed by the Assessee and it was detected by him after the order of assessment, and the order of assessment is not erroneous, none the less it is open to the Assessee to file a revision before the Commissioner under Section 264 of the Act and claim appropriate relief. But it should not be forg....