By K. B. Bhujle, Advocate
fiogf49gjkf0d
For the A.Y. 1996-97, in the return of income the assessee had offered an amount of Rs.7,18,050 being interest on FCNR deposits as taxable income. In appeal, the Commissioner (Appeals) had remanded the matter to the Assessing Officer. In the course of fresh assessment proceedings, the assessee realised that the interest of FCNR deposits was exempt u/s.10(15) (iv)(fa) of the Income-tax Act, 1961. Therefore, by a letter dated 5-1-2000, the assessee requested the Assessing Officer to exclude the amount from the taxable income. The Assessing Officer did not consider the request. The assessee, preferred a revision application u/s.264 to the Commissioner requesting for the relief. The Commissioner rejected the revision application.
The Gujarat High Court allowed the writ petition filed by the assessee and held as under:
“(i) The income-tax authorities under the Incometax Act, 1961, are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is overasses-sed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected.
(ii) Once the assessee had approached the Commissioner u/s.264, the Commissioner was required to apply his mind to whether the assessee was entitled to the relief prayed for. He was not justified in dismissing the application merely on the ground that it was the assessee who had shown the interest as his income for the year under consideration.
(iii) The Commissioner (Appeals) upon appreciation of the evidence on record had, as a matter of fact, found that the assessee was not ordinarily resident during the relevant periods. The present year fell between the said assessment years. Hence, it was apparent that the assessee was ‘not ordinarily resident’ for the year under consideration. The Commissioner was, therefore, not justified in rejecting the application u/s.264.”
