Revision – Section 264 of ITA, 1961 – Application for revision – Powers of Commissioner – Powers u/s 264 are very wide – Mistake in computation of income and revised return barred by limitation – Commissioner finding that mistake was inadvertent and claim for deduction bona fide – Order rejecting application for revision is not valid Income-tax – General principles – Effect of Article 265 of the Constitution of India – No tax collection except by authority of law

7. Sharp Tools vs. Principal
CIT

[2020] 421 ITR 90 (Mad.)

Date of order: 23^rd
October, 2019

A.Y.: 2013-14

Revision – Section 264 of ITA,
1961 – Application for revision – Powers of Commissioner – Powers u/s 264 are
very wide – Mistake in computation of income and revised return barred by
limitation – Commissioner finding that mistake was inadvertent and claim for
deduction bona fide – Order rejecting application for revision is not
valid

Income-tax – General principles –
Effect of Article 265 of the Constitution of India – No tax collection except
by authority of law

The assessee
filed its return of income for the A.Y. 2013-14. It then received an intimation
u/s 143(1) of the Income-tax Act, 1961 accepting the returned income.
Thereafter, the assessee realised that a mistake had inadvertently crept in
while filling up the quantum in column 14(i) of the return. Therefore, on 9^th
January, 2016, the assessee filed a revised return rectifying the mistake. The
return was not processed by the Central Processing Centre, since it was
considered as a revised return filed beyond the specified time u/s 139(5) of
the Act. The assessee made an application to the A.O. for rectification u/s
154. The A.O. rejected the plea,  stating
that the claim was belated. Thereafter, the assessee filed a revision petition
u/s 264. Though the Principal Commissioner found that the mistake was inadvertent
and that the claim was bona fide, he rejected the revision petition.

The assessee filed a writ
petition against the order. The Madras High Court allowed the writ petition and
held
as under:

‘i)    A careful perusal of section 264 of the Income-tax Act, 1961
would show that it empowers the Principal Commissioner or the Commissioner to
exercise the revisional jurisdiction over “any order” other than the
order to which section 263 applies. Such power is wider and confers on such
authority the responsibility to set things right wherever he finds that an
injustice has been done to the assessee. Before passing any order u/s 264 of
the Act, it is open to the authority to make such inquiry or cause such inquiry
to be made. However, such order should not be prejudicial to the assessee.

ii)    Article 265 of the Constitution of India specifically states that
no tax shall be levied or collected except by authority of law. Therefore, both
the levy and collection must be with the authority of law, and if any levy or
collection is later found to be wrong or without authority of law, certainly
such levy or collection cannot withstand the scrutiny of the Constitutional
provision and would be in violation of article 265 of the Constitution of
India.

iii)   A mere typographical error committed by the
assessee could not cost it payment of excess tax as collected by the Revenue.
The denial of repayment of such excess collection would amount to great
injustice to the assessee. Even though the statute prescribes a time limit for
getting the relief before the A.O. by way of filing a revised return, there was
no embargo on the Commissioner to exercise his power and grant the relief u/s
264. The order rejecting the application for revision was not valid.