TaxTMI 
TaxTMI 
2024 (11) TMI 94
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....ner has challenged the legality and validity of the order dated 22.03.2019 passed by the respondent Commissioner of Income Tax (Exemption) under section 264 of the Income Tax Act, 1961 (For short "the Act") as well as order/communication dated 29.03.2017 issued under section 154 of the Act. 5. Brief facts of the case are that the petitioner is a charitable trust registered with Charity Commissioner, Ahmedabad having Registration No. F-227 dated 19.08.1964. Subsequently, the trust was granted registration under section 12AA of the Act on 06.01.1975 and allotted registration no. 64G.71/74. The said trust is running students hostel in Ahmedabad and Dharmashala in Ambaji. 6. The petitioner filed its return of income for the Assessment Year 2014-2015 on 20.09.2014 by claiming application of income of Rs. 16,09,553/- on Gross Total Income of Rs. 21,88,443/-. After claiming aforesaid application of income, tax payable was arrived at Rs. 5214/- which was adjusted against Tax Deducted at Source of Rs. 45,604/- and accordingly, refund of Rs. 40,360/- was due to the petitioner at time of filing of original return as per the acknowledgement of income generated from the portal of Income T....
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....the respondent No. 1 was appraised about the genuine bona fide technical error occurred while uploading return in XML utility on the Income Tax Portal. The petitioner also annexed original return, rectified return and audit report in Form No. 10B to establish its bona fide that audit that audit report, which was obtained on 08.09.2014 i.e before filing of original return on 20.09.2014, had clearly mentioned that petitioner has applied amount of Rs. 16,09,553/- in the year under consideration and hence, there is no occasion not to claim application of Rs. 16,09,553/-. 10. Respondent No. 1 dismissed the revision application preferred under section 264 of the Act by order dated 22.03.2019. 11. Thereafter, the petitioner received certain recovery notices under section 226 of the Act. Subsequently, the petitioner came to know that it is unable to operate his Savings bank account bearing no.72500100003623 maintained with Bank of Baroda, Nava Vadaj Branch and hence, the petitioner addressed letter dated 13.12.2022 to Branch Manager of the bank asking him to provide the reasons and supporting evidences to freeze the bank account of the petitioner. It is the case of the petitioner tha....
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....earned Senior Standing Counsel Ms. Maithili Mehta for the respondent placed reliance upon the following averments made in affidavit in reply filed on behalf of the respondent : "7.1 say and submit that the assessee, petitioner herein, filed their Return of Income for AY 2014-15 on 20.09.2014. As per the said returns, a gross total income of Rs. 21,88,443/- was declared. The amount reflected in the column of 'application of income towards charitable purposes' was NIL. Hence, the total income as per Part B-Total Income' in the said returns was calculated at Rs. 18,60,180/-. 8. I say and submit that the said return was processed u/s 143 (1) of the I.T. Act on 18.11.2016, wherein it was observed that the tax payable was wrongly calculated at Rs, 5214/. Hence, the assessing officer revised the amount of tax payable as Rs. 4,80,870/- including interest u/s 234B and 234C of the Act for late payment of tax which is calculated on the total income of Rs. 18,60,180/-, after setting aside 15% of the total income being Rs. 3,28,266 as per provisions of section 11 (1) (a) and 11 (1) (b). For the purpose of clarity, the calculation of total taxable income is as below....
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....ation u/s 264. C. There was lack of evidence to prove the omission of 'income applied' by the assessee due to technical error. D. There was no evidence to prove that Form 10B was filed manually in due date. The CIT(E) further stated that the remedy of revision lies in narrow compass and the said remedy cannot be treated as a regular appellate remedy. 12. I further say and submit that the assessee failed to comply with the statutory provisions of filing of Form 10B which was not filed within the due date. The assessee claims to have filed the said form manually but there are no evidences proving the same. It was filed online on 18.09.2019 which was after a considerable period from the due date and after the passing of order u/s 264 of the Act by the CIT(E), Ahmedabad. 13. I say and submit that after the said application, the Department issued various demand notices to the assessee requesting payment of the outstanding dues, however, the assessee failed to pay the said outstanding tax dues to the Department or reply to the notices issued." 19. Referring to the above averments, it was submitted that the respondent has rightly rej....
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....faced by an aggrieved assessee, who is unable to approach the Appellate Authorities for relief and has no other alternate remedy available under the Act. The Commissioner is bound to apply his mind to the question whether petitioner was taxable on that income and his powers are not limited to correct the error committed by the subordinate authorities but could even be exercised where errors are committed by assessee. It would even cover situation where assessee because of an error has not put forth legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time in an application under section 264 of the Act. Paragraphs 7 and 8 of Smita Rohit Gupta (supra), read as under: "7. The provisions of section 264 and the power available to the Commissioner to exercise under section 264 of the Act came up for consideration before the Division Bench of this Court in Hindustan Diamond Company Pvt. Ltd. v. CIT 2. The Division Bench was pleased to observe that exercise of power under section 264 was not subject to the power of the Assessing Officer to make adjustment under section 143 (1) of the Act. The Court held that power o....
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....e Act are very wide. The Commissioner is bound to apply his mind to the question whether the petitioner was taxable on that income. Since section 264 uses the expression "any order", it would imply that the section does not limit the power to correct errors committed by the subordinate authorities but could even be exercised where errors are committed by assessees. It would even cover situations where assessee because of an error has not put forth a legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time in an application under section 264. " (emphasis supplied) 12. In Ms. Asmita A. Damale (supra), also the court held that the Commissioner while exercising revisionary powers under section 264 of the Act has to ensure that there is relief provided to assessee where the law permits the same. Paragraphs 3 and 4 read as under: "3 In view thereof, assessee filed the application under section 154 for rectification of the assessment order. This application was rejected. Against that order, the petitioner filed a revision under section 264 of the Act to the Commissioner of Income-tax, for refund.....
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....ere available at the time of assessment. We are not impressed with the distinction. The necessity for the insertion of a definition of 'record' by the Finance Act 1988 has been explained in a Circular issued by the Central Board of Direct Taxes No. 528 dated 16-12-1998 to the following effect. 39.1 Under the existing provisions of section 263 of the Income-tax Act, the Commissioner of Income-tax is empowered to call for and examine the record of any proceeding and if he considers that the order passed by the Assessing Officer is erroneous insofar as it is prejudicial to the interest of revenue, he may pass an order enhancing or modifying the assessment or cancelling the same with a direction to make it afresh. The provisions as presently worded have given rise to two areas of controversy. The first is relating to the interpretation of the word "record" and the second is regarding the issue relating to merger of the order of the Assessing Officer with the order of the appellate authority. Courts have held in some cases that the word 'record' occurring in section 263 could not mean the record as it stood at the time of examination by the CIT but the record as....
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....not section 264. The distinction noted by the Division Bench in that case was that the power of revision under section 263 of the Act was intended to be exercised in cases where the interests of revenue were prejudiced and it was for this reason that the inquiry of the Commissioner of Income-tax was not limited only to material available before the Assessing Officer, but also material obtained subsequently. The power under section 264 of the Act is, in fact as wide a power, and one that is intended to prevent miscarriage of justice. Courts have consistently taken a view that the conferment of powers under section 264 of the Act is to enable the Commissioner to provide relief to an assessee, where the law permits the same. Reference may be made to the decisions of the Gujarat High Court in C. Parikh and Co. v. Commissioner of Income-tax (122 ITR 610); Ramdev Exports v. Commissioner of Income-tax (251 ITR 873); Kerala High Court in Parekh Brothers v. Commissioner of Income-tax and Calcutta High Court in Smt. Phool Lata Somani v. Commissioner of Income-tax (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....