Revision: Section 264: A. Y. 2007-08: Claim for exemption in return but by mistake not shown in computation: Intimation u/s. 143(1) denying exemption: Rejection of application for revision: Not justified:

For the A. Y. 2007-08, in the return of income, the assessee made a claim for exemption u/ss. 10(34) and 10(38) in respect of the dividend and long-term capital gains. However, by mistake, included the dividend of the long term capital gain in the total income in the computation. Intimation u/s. 143(1) of the Act denied the exemption. The assessee filed an application for rectification u/s. 154. The assessee also filed revision petition u/s. 264 of the Act which was rejected by the Commissioner.

The Bombay High Court allowed the writ petition filed by the assessee and held as under:

“i) The entire object of administration of tax is to secure revenue for the development of the country and not to charge the assessee more tax than that which is due and payable by the assessee. On April 11, 1955, the CBDT issued a circular directing the Assessing Officer not to take advantage of the assessee’s ignorance or mistake.

ii) The Commissioner committed a fundamental error in proceeding on the basis that no deduction on account of dividend income and income from capital gains u/s. 10 of the Act was claimed. Therefore, there was an error on the face of the order and the order was not sustainable.

iii) The Assessing Officer was directed to treat the application dated 08/02/2010, as a fresh application at the earliest preferably within six weeks of the order.”