TaxTMI 
TaxTMI 
2019 (10) TMI 1196
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.... claim of Rs. 1,87,82,244/- comprises of Labour charges to the tune of Rs. 56,12,426/- Wages to the tune of Rs. 75,14,652/- and Salary and Bonus to the tune of Rs. 56,55,166/-. The difference on account of the wrong entry being Rs. 49,22,735/- was reckoned as the income of the petitioner in the intimation dated 04.05.2014 issued under Section 143(1) of the IT Act and demand of Rs. 17,37,280/- was raised comprising tax and interest. After adjusting tax credit of Rs. 3,17,381/- the balance tax payable was determined as Rs. 14,19,900/-. On receipt of the said intimation and realizing the mistake, which has crept in inadvertently while filling up the quantum in column No.14(i) of the return, a rectification return was filed on 09.01.2016. The said return was not processed by the Central Processing Centre, since the return was considered as revised return filed beyond the specified time under Section 139(5) of the IT Act. The petitioner made an application to the Assistant Commissioner of Income Tax, for rectification under Section 154 of the IT Act. The Assessing Officer, rejected the plea for rectification, by his order dated 24.10.2017, stating that the claim was belated. Thereaft....
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....ling such revised return had already expired. Even if the revised return is not filed, the Commissioner, by exercising his power under Section 264 of the IT Act, can grant the relief. The respondent failed to note that Circular No.14 of 1955 dated 11.04.1955 empowers the authorities to permit the correction of mistake and that the Department must not take advantage of ignorance of an Assessee as to his rights. The application under Section 264 of the IT Act, was filed before the respondent within one year from the date of rejection of the rectification return. 6. In support of the above contention, the learned counsel for the petitioner relied on the following decisions: (i) [2016] 75 taxmann.com 298 (Ker), Transformers & Electricals Kerala Ltd., Vs. Deputy CIT. (ii) [2017] 394 ITR 247 (Mad), Sri Selvamuthukumar Vs. CIT. (iii) [2018] 402 ITR 271 (Mad), M/s.Bali Trading Pvt. Ltd., Vs. Principal CIT. (iv) [2016] 386 ITR 643 (Del.), Vijay Gupta Vs. CIT. 7. Per contra, the learned standing counsel for the respondent, after reiterating the contentions raised in the counter affidavit, has further submitted as follows: The original return was f....
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....fore completion of the assessment, whichever is earlier. Though the petitioner has not filed any revised return within such time, however, on receipt of an intimation under Section 143(3) of the IT Act, dated 04.05.2014, the petitioner had realized the mistake and filed a rectification return on 09.01.2016. It is true that rectification return was filed nearly after two years from the date of receipt of Section 143(1) intimation. The said rectification return was rejected by the Assessing Officer by proceedings dated 24.10.2017 on the reason that the same was not filed within the time and thus, it is not valid and cannot be sustained. Thereafter, the Assessee filed an application under Section 264 of the IT Act on 25.01.2018, admittedly, within one year from the date of the order rejecting the rectification return. The respondent before whom, the said revision was filed, passed the impugned order, wherein at Paragraph Nos.9, 10, & 11 he observed as follows: "9. The Assessee in its P&L account had claimed expenditure under the grouping "Compensation to Employees" inclusive of labour charges of Rs. 56,12,426/- wages of Rs. 75,14,652/- and salary and bonus of Rs. 56,55,166/-.....
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....make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit. (2) The [Principal Commissioner or Commissioner] shall not of his own motion revise any order under this section if the order has been made more than one year previously. (3) In the case of an application for revision under this section by the assessee, the application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier: Provided that the [Principal Commissioner or Commissioner] may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period. (4) The [Principal Commissioner or Commissioner] shall not revise any order under this section in the following cases - (a) where an appeal against the order lies to the Deputy Commissioner (Appeals) or to the 4[Principal Commissioner or Commissioner] (Appeals) or to the Appella....
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.... order under Section 264 of the IT Act, it is open to the said authority to make such enquiry or cause such enquiry to be made. However, such order should not be prejudicial to the Assessee. 14. The power and scope under Section 264 of the IT Act, have been considered by the Courts. In a decision rendered by the High Court of Kerala, reported in [2016] 75 taxmann.com 298 (Ker), Transformers & Electricals Kerala Ltd., Vs. Deputy CIT., observed at Paragraph No.8 as follows: 8. In fact the judgment in Goetze (India) Ltd. (supra) was with reference to the power of the Tribunal under Section 254 of the IT Act which can have no basis for the power to be exercised by the Commissioner under Section 264 of the IT Act. Very wide powers have been conferred on the Commissioner under Section 264 of the IT Act to conduct an enquiry to be made and to pass such orders, as he thinks fit. In the impugned order, the Commissioner proceeds on the basis that the petitioner had not filed a revised return for the year 2008-09. It is pointed out by the petitioner that the time for filing a revised return had already expired and once the said period has expired, revised return cannot be filed. T....
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....ool Lata Somani Vs. Commissioner of Income Tax (MANU/WB/0081/2005 : 276 ITR 216). In this view of the matter, we see no reason to take a different view on the interpretation of the word 'record' occurring in section 264 of the Act from that expressed by the Central Board of Direct Taxes in the Circular extracted above. The order under section 144A dated 31.12.2007 is thus part of the record and ought to have been take into consideration in deciding the petition under section 264 of the Act. 13. The relief provided in terms of section 139(5) is specific to the correction of a wrong statement or an omission in the original return by way of a revised return. The power under section 264 of the Act extends to passing any order as the Principal Commissioner or Commissioner may think fit after making an inquiry and subject to the provisions of the Act, either suo-moto or on an application by the assessee. Though the remedies over lap, power under section 264 is significantly wider and the wisdom of choosing one over the other would really depend on the facts and legal position of each case. 16. In [2018] 402 ITR 271 (Mad), M/s.Bali Trading Pvt. Ltd., Vs. Principal CIT.....
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....e of filing the return and the error is subsequently discovered and is raised for the first time in an application under Section 264. 36. An assessee is liable to tax only upon such receipt as can be included in his total income and is assessable under the Income-tax Act. 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 because of which he was over-assessed after the assessment was completed. Once it is found that there was a mistake in making an assessment, the Commissioner had power to correct it under s. 264(1). When the substantive law confers a benefit on the assessee under a statute, it cannot be taken away by the adjudicatory authority on mere technicalities. It is settled proposition of law that no tax can be levied or recovered without authority of law. Article 265 of the Constitution of India and section 114 of the State Constitution imposes an embargo on imposition and collection of tax if the same is without authority of law. 39. When the commissioner was called upon to examine the revision application under section 2....
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.... thereon notwithstanding the fact that the Assessee has not approached the Assessing Officer within the time stipulated for filing the revised return. If such technical objection is allowed to stand in the way of the Commissioner in exercising his jurisdiction/power under Section 264 of the IT Act, it would certainly, result in defeating the very purpose and object of granting such ample and wider power to the Commissioner under Section 264 of the IT Act. An apparent injustice or miscarriage of justice need to be set right, notwithstanding the technical objections, if any. While the substantial justice is the King, technicalities are only his soldiers. Certainly, the King can do no wrong and thus, let the soldiers do not stand in his way. 20. At this juncture, it is very relevant and useful to quote the observation of the Apex Court reported in [2013] 4 SCC 97, Laxmibai (Dead) through LRs and another Vs. Bhagwantbuva (Dead) through LRs and others, that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. The Apex Court has also gone to the extent of saying that the Courts may in the lar....
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.... of excess tax over and above the tax payable by the Assessee, even though they admit that only due to inadvertent mistake, a wrong entry was made by the Assessee with lessor figure of the relevant expenses than the actual expenses met out. At this juncture, it is relevant to note that Article 265 of the Constitution of India specifically states that no tax shall be levied or collected except by authority of law. Therefore, both the levy and collection must be done with the authority of law, and if any levy and collection, later are found to be wrong and without authority of law, certainly, such levy and collection cannot withstand the scrutiny of the above constitutional provision and thus, such levy and collection would amount in violation of Article 265 of the Constitution of India. 24. Therefore, it is apparent on the facts and circumstances of the present case, that a mere typographical error committed by the Assessee cannot cost them payment of excess tax as collected by the Revenue. Certainly, the denial for repayment of such excess collection would amount to great injustice to the Assessee. 25. Even though the Statute prescribes a time limit for getting the relief ....