2026 (1) TMI 370

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....ust which was set up on 05.09.1976 for charitable and religious purposes and is registered under Section 12A of the IT Act. 4. For the relevant Assessment Year 2016-17 the petitioner filed its return of income declaring a total income of Rs.7,89,338/-. 5. On 24.08.2017 the above referred ITR was processed under Section 143(1) wherein certain adverse adjustments were made, and the total income was recomputed at Rs.10,88,166/-. 6. On perusal of the above intimation, the Petitioner realized mistakes/errors committed by it in the ITR and filed an application on the e-portal for rectification on 04.10.2017 before Respondent No.3 (i.e. Asst. Director of Income tax, Centralized Processing Centre, Bengaluru). However, vide communication dated 09.01.2018 the ITR was reprocessed as it was processed in the original intimation issued under Section 143(1). On 24.07.2019 the Petitioner made another rectification application on the e-portal. However, again the ITR was re-processed as it was processed in the original intimation issued under Section 143(1). On 27.08.2019, the Petitioner made a request for deletion of demand raised in consequence of the intimation issued under Section 143(1....

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....ion of the Petitioner. It was submitted that because the acknowledgment of filing the ITR displayed the correct figure of the total income, the Petitioner was under a bonafide belief that the particulars of the return of income were correct. It is stated that while processing the return of income, the processing system has recognized the errors committed by the Petitioner in the ITR and accordingly made the adverse adjustments. 10. Mr. Jain, fairly stated that the Petitioner committed certain punching errors in the ITR leading to denial of exemption under Section 11 of the IT Act in the intimation issued under Section 143(1). Consequent to the same, the Petitioner vigilantly applied for rectification of the impugned intimation issued under Section 143(1), several times where it did not succeed. Hence, it filed the application for revision before Respondent No.1 pursuant to the provisions of Section 264 of the IT Act. 11. Mr. Jain submitted that Respondent No.1, under Section 264, can also adjudicate on mistakes/errors committed by the assessee in the ITR and can also consider the claims not made by the assessee in the return of income. In support of this proposition reliance ....

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....f Mr. Chatterjee, Mr. Jain submitted that where the time limit to file a revised return was over, the statute provides an option to the assessee to either file an appeal before the Commissioner of Income Tax (Appeals), or to file a revision application under Section 264 before the prescribed authorities. Exercising this discretion, the Petitioner preferred to file the revision application under Section 264. He also relied upon the decision of this Court in the case of Bahar Infocons (P.) Ltd. vs. PCIT [(2025) 476 ITR 615 (Bombay) dated 23-09-2024] and Hapag Lloyd India Pvt. Ltd. vs. PCIT [WP No.2332 of 2021 order dated 09.02.2022] and submitted that there is no bar under Section 264 which prevents Respondent No.1 to consider claims not made in the ITR. 15. We have heard both the parties at length and have also perused the records produced before us and also the affidavit in reply filed by the Respondents. 16. Firstly, we are in agreement with the submission made by Mr. Jain that the assessee has the discretion to either file an appeal under the provisions of Section 246A of the IT Act before the Commissioner of Income tax (Appeals) against an appealable order or to apply for ....

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....ra), where the assessee committed errors in filing the return of income, this court held as under:- "8. Therefore, as the power conferred under section 264 of the Act is very wide, in our view, the Commissioner is duty bound to apply his mind to the application filed by the assessee and pass such order thereon. Section 264 of the Act also empowers respondent no.1 to call for the record of any proceedings under the Act in which any order has been passed and make such inquiry or cause such inquiry to be made and pass such order as he thinks fit. Therefore, if respondent no.1 feels that detailed inquiry is necessary and he will be hard pressed for time, he may cause such inquiry made by the Assessing Officer and direct the Assessing Officer to file a report. 9. In the present case, as per petitioner in his return of income he has made mistakes as noted earlier in this order. Looking at the mistake, it is rather obvious that it was not a deliberate mistake or an attempt to gain some unfair advantage or to evade any tax. 10. In the circumstances, we quash and set aside the order dated 27th March 2017 passed under Section 264 of the Act, order dated 21st Septem....