TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 707
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....ner has challenged the order dated 30.03.2024 passed by the respondent No. 1-Principal Commissioner of Income Tax, Surat-I under section 264 of the Income Tax Act, 1961 [for short 'the Act'] for the Assessment Year 2021-2022. 5. Brief facts of the case are that the petitioner filed return of income for A.Y. 2021-2022 on 18.02.2022 declaring total income of Rs. 14,30,22,235/-. 6. It is the case of the petitioner that the person, who was responsible for filing return of income, forgot to claim 'Long Term Capital Loss' (for short 'LTCG') arising on account of extinguishment of shares of Garden Silk Mills Ltd which were acquired by the petitioner since 1994. The National Company Law Tribunal [NCLT for short] passed the order in the beginning of the Financial Year 2020-2021 relevant to the year under consideration the petitioner had 4,80,878 shares of the said company. The said company was subjected to the proceedings under the Insolvency and Bankruptcy Code,2016 [for short 'IBC'] before the NCLT who, by order dated 01.01.2021 in IA No. 661/2020 CP(IB) 453/2018, directed the extinguishment of the equity shares of the said Company. 7. According to the petitioner, Fair Value of the inv....
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....ng aggrieved, the petitioner has preferred this petition challenging the aforesaid order. 12. Learned Senior Advocate Mr. Hemani for the petitioner submitted that admittedly, the petitioner did not claim the LTCG arising out of the extinguishment of the shares of the Garden Silk Mills Ltd in the return of income. Pursuant to the order dated 01.01.2021 passed by the NCLT, the same was given effect in the audited balance sheet for the year under consideration. 13. Learned Senior advocate Mr. Hemani invited attention of the Court to Note No.3 in the notes annexed forming part of the financial statement as well as Note No.26 where the loss was claimed by the petitioner of Rs. 121.88 lakhs on account of extinguishment of the shares of the said company. 14. It was therefore submitted that respondent No. 1 was required to consider the prayer made by the petitioner to permit the petitioner to claim such loss in the return of income and adjudicate the same whether the petitioner is eligible or not as per the provisions of section 254 of the Act. It was submitted that respondent No. 1 rejected the revision application merely on the ground that the application is not maintainable as the LT....
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....he petitioner had forgotten to claim the LTCG while filing return of income which can be considered as bona fide mistake so as to enable the petitioner to file a revised return beyond the period of limitation. It was further submitted that the so called bona fide mistake or error committed at the stage of filing of return of income cannot entitle the petitioner to revise the return as the petitioner did not claim such LTCG in the original return filed under section 139(1) of the Act. It was further submitted that when the petitioner has not claimed any loss of the Garden Silk Mills Ltd in the original return, such loss cannot be allowed while exercising the jurisdiction under section 264 of the Act and the respondent No. 1 has therefore, rightly rejected the revision application. 18. It was further submitted that respondent No. 1 has also adjudicated the claim of the petitioner on merits after considering the provisions of section 2 (22) ((d) of the Act as the same is applicable in the facts of the case as the extinguishment of the shares is akin to the reduction in capital and therefore the provision of section 2 (22) (d) of the Act would be applicable. It was further submitted t....
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....te regarding the petitioner's entitlement to the benefit. The only question is whether the petitioner is entitled to enforce that remedy in the manner in which she has done. In a similar matter, a Division Bench of this Court in the case of Devdas Rama Mangalore v/s The Commissioner of Income Tax-26 and Ors in Writ Petition No. 2422 of 2013 dated 15th January 2014, granted complete relief, including an order of refund. The only difference between this case and that case is that, in that case, the petitioner had made an application for condonation of delay under Section 119 (2) (b) of the Income Tax Act, which was rejected, in view of the circular issued by the CBDT. In the case before us, the course adopted was under Section 264 of the Act. In view of the judgment of the Division Bench of this Court in Hindustan Diamond Company Pvt Ltd v/s Commissioner of Income Tax reported in (2003) 175 Taxation 91 (Bom), the course adopted by the petitioner in the facts and circumstances of the present case was valid." 13. In Selvamuthukumar(Supra) paragraphs 6 to 11 and 13 read as under: "6. The language of section 264 provides ample powers to the Commissioner of Income Tax to make or c....
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....o restrictive, as many times information comes on record from various sources which indicate that the order of the Assessing Officer is erroneous and prejudicial to the interests of revenue. The above interpretation of the term "record" by some court besides being against the legislative intent also defeats the very objective sought to be achieved which is to revise the orders on the basis of records as is available to the CIT at the time of examination. With a view to clarifying the legislative intent of the term "record", a definition of the term "record" has been inserted in the Explanation to sub-section (1) of section 263 by the Finance Act to include all records relating to any proceedings under the Act available at the time of examination by the CIT. This has been carried out for removal of doubts." (emphasis supplied) 8. Useful reference can also be made to a judgment of the Supreme Court in the case of Commissioner of Income Tax v. Sri. Manjunathesware Packing Products and Camphor Works (231 ITR 53), wherein the Supreme Court, while considering the import of the word 'record' in section 263 of the Act states as follows:-- 'If the material, which was not ava....
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.... into consideration in deciding the petition under section 264 of the Act. 11. In fact the objection raised by the Department is hyper technical and runs counter to the stand taken by it in the assessment of this appellant in the three earlier assessment orders. Thus even applying the principles of consistency the treatment accorded to an issue arising in a continuing transaction should be consistent for the entire period in question. 12************** 13. Mr. Swaminathan would submit that the appellant ought to have filed a revised return under section 139(5) since there was sufficient time available and not having done so, he cannot seek remedy under section 264 of the Act. He would urge that both reliefs cannot run concurrently and one can be availed of only when the other is exhausted as otherwise an assessee who misses the time limit for Meera Jadhav 12/12 904-wp-2435-17.doc filing a revised return would take recourse to the provisions of section 264 and seek a revision." 14. At this stage, Mr. Suresh Kumar submitted that assessee should produce documents to prove his share of the indexed renovation expenses of Rs.2,95,859/-. In our view, it is not required because in t....