Nashik v. The Commissioner Of Income Tax - 1

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 10653 OF 2011 Janata Co-operative Bank Ltd., Nashik. .. Petitioner. versus The Commissioner of Income Tax - 1 Nashik & Ors. .. Respondents...... Mr. Subhash Shetty with Mr. Atul K. Jasani for the Petitioner. Mr. Vimal Gupta for the Respondents. ...... CORAM : DR.D.Y.CHANDRACHUD &A. A. SAYED, JJ. P.C. : 15 DECEMBER 2011. These proceedings are directed against an order passed by the Commissioner of Income Tax-1, Nashik on 27 June 2011 declining to exercise his jurisdiction under Section 154 of the Income Tax Act, 1961. An order was passed under Section 264 by the Commissioner of Income Tax on 6 December 2010 in revision against an order of assessment for Assessment Year 2007-08 finalised on 21 December 2009 under Section 143 (3) by the Additional Commissioner of Income Tax, Range-3, Malegaon. The claim of the assessee to the extent of contribution towards the payment of gratuity fund made during the previous year relevant to Assessment Year 2007-08 was allowed to the extent of Rs.6.80 lakhs while the balance in the amount of Rs. 31.25 lakhs was disallowed. The assessee applied under Section 154 for rectification. The Commissioner of Income Tax has declined to entertain the application placing reliance on Section 154 (1A). Section 154 (1A) reads as follows : “Where any matter has been considered anddecided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided.” 2.Learned Counsel appearing on behalf of the Petitioners submits that Section 154 (1A) applies in a situation where any matter has been considered and decided in a proceeding by way of appeal or revision relating to an order referred to in sub-section (1). Under sub-section (1) of Section 154 a mistake apparent from the record can be rectified by amending, inter alia, any order passed under the provisions of the Act on any intimation or deemed intimation under Section 154(1). However, Section 154 (1A) provides that the authority passing such an order may amend the order in relation to any matter other than the matter which has been so considered and decided. The contention which has been raised on behalf of the Petitioner is that Section 154 (1A) will preclude the authority which has passed the order from exercising the jurisdiction to rectify the order where that particular matter has been considered and decided in appeal or revision. However, in the present case, Section 154 (1A) will not come in the way since, the jurisdiction was invoked not of the original assessing authority but of the Commissioner who had passed an order under Section 264. 3.We find merit in the contention which has been urged on behalf of the Petitioner. In the present case, the revisional authority had passed an order in revision on 6 December 2010. The application for rectification was not made before the Assessing Officer who passed the assessment order which was the subject matter of revision, but, the application was made before the revisional authority itself for rectification. Such an application was maintainable and was not barred by Section 154 (1A). In these circumstances, we are of the view that the Commissioner of Income Tax has erred in declining to entertain the application for rectification. 4.We, therefore, set aside the impugned order dated 27 June 2011 and restore the proceedings arising out of the application for rectification under Section 154 to the Commissioner of Income Tax. We clarify that we have had no occasion to examine whether a case of rectification has been made out on merits. The Petition is, accordingly, disposed of in these terms. There shall be no order as to costs. 4.We, therefore, set aside the impugned order dated 27 June 2011 and restore the proceedings arising out of the application for rectification under Section 154 to the Commissioner of Income Tax. We clarify that we have had no occasion to examine whether a case of rectification has been made out on merits. The Petition is, accordingly, disposed of in these terms. There shall be no order as to costs. (Dr. D.Y. Chandrachud, J.) (A. A. Sayed, J.)