P.mahaveer v. The Commissioner Of Income Tax-Viii,3[Rd] Floor, Main Building

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMW.P.Nos.13211, 13212 & 14368 of 2011 P.Ajeeth... Petitioner inW.P.No.13211/2011 P.Mahaveer... Petitioner inW.P.No.13212/2011P.Santhosh Bai Jain... Petitioner inW.P.No.14368/2011 Vs. The Commissioner of Income Tax-VIII,3[rd] Floor, Main Building,121, Nungambakkam High Road,Nungambakkam, Chennai-600 034. ... Respondent in all the W.Ps. Prayer in W.P.Nos.13211 & 13212 of 2011 : Petitions filedunder Article 226 of the Constitution of India praying forissuance of Writ of Certiorarified Mandamus, to call for therecords of the impugned orders in C.No.22(7)/CIT VIII/264/2009-10 & C.No.22(8)/CIT VIII/264/2009-10 respectively, dated 25[th]March 2011 passed by the respondent and quash the same anddirecting the respondent to consider the plea for the exclusionof the capital gains tax on the sale of agricultural land andgrant refund and also interest on the amount to be refunded. Prayer in W.P.No.14368 of 2011 : Petition filed under Article226 of the Constitution of India praying for issuance of Writ ofCertiorarified Mandamus, to call for the records of the impugnedorder No. C.No.22(6)/CIT VIII/264/2009-10, dated 25.03.2011,passed by the respondent and quash the same and directing therespondent to consider the petitioner's plea for the grant ofrefund of tax by excluding the capital gains on agriculturalland and interest on the refunded amount. For Petitioner :Mr.V.S.Jayakumarin all the petitionsFor Respondent :Mr.J.Narayanaswamy,in all the petitionsSenior Standing Counsel****** Heard Mr.V.S.Jayakumar, learned counsel for the petitionerand Mr.J.Narayanaswamy, learned Senior Standing Counsel for therespondents. 2.The petitioners in these three writ petitions are themother and two sons and they have challenged an order passed bythe Commissioner of Income Tax, Chennai dated 25.03.2011,rejecting the petitioners' petitions filed under Section 264 ofthe Income Tax Act, 1961. 3.The reason for rejection of the petitions as could be seenfrom para 4.3 of the impugned orders is that, in the absence ofany revised return or new material facts, the order passed bythe assessing officer does not call for interference. 4.In this regard, the respondent had placed reliance on thedecision of the Hon'ble Supreme Court in the case of Goetze(India) Ltd. v. CIT reported in (2006) 284 ITR 323 (SC). Thisvery issue was considered by this Court in the case of M/s.BaliTrading Pvt. Ltd. v. Principal Commissioner of Income-tax andanother in W.P.No.10599 of 2017 dated 04.09.2017, and in thesaid case, the Court framed four questions for consideration ofwhich, question Nos.1 to 3 would be relevant to the presentcases and they are as follows: “(i) Whether the Principal Commissioner ofIncome Tax, the first respondent was right inrejecting the Revision Petition filed by thepetitioner under Section 264 of the Act againstthe order passed by the Assessing Officer, thesecond respondent, who rejected the petitioner'srequest to rectify the assessment for theassessment year 2012-2013 ?(ii) whether the Assessing Officer was rightin relying on M/s.Goetze India (supra), to rejectthe request for rectification?(iii) What are the powers of theCommissioner under Section 264 of the Act ?” 5.The Court after taking into consideration the decision inthe case of Goetze (India) Ltd., and other decisions, answeredthe above questions on the following lines:-“11. Thus, the legal principle which emergesfrom the above decisions are:- (i) The Assessing Officer cannot entertain aclaim for deduction otherwise than by filing arevised return. This does not impinge upon thepower of the ITAT under Section 254 of the Act. https://hcservices.ecourts.gov.in/hcservices/ 5.The Court after taking into consideration the decision inthe case of Goetze (India) Ltd., and other decisions, answeredthe above questions on the following lines:-“11. Thus, the legal principle which emergesfrom the above decisions are:- (i) The Assessing Officer cannot entertain aclaim for deduction otherwise than by filing arevised return. This does not impinge upon thepower of the ITAT under Section 254 of the Act. https://hcservices.ecourts.gov.in/hcservices/ (ii) The language of Section 264 providesample power to the CIT to make or cause suchinquiry to be made as he thinks fit in dealingwith application for revision under Section 264 ofthe Act. (iii) Limiting the power of the CIT only tothe situation that was existing at the time ofmaking assessment is to make the power of the CITunder Section 263 too restrictive. (iv) Material which was not available to theITO when he made the assessment could be takeninto considerations by CIT after holding anenquiry, though such material has come on recordsubsequent to the making of the assessment. (v) The power under Section 264 of the Act isa wide power, and one that is intended to preventmiscarriage of justice. (vi) Powers under Section 264 of the Act isto enable the Commissioner to provide relief to anassessee, where the law permits the same. (vii) The embargo placed on a assessingOfficer in considering a new claim would notimpinge on the power of the appellate authority orthe revisional authority. (viii) The phraseology adopted in Section 264of the Act is of the widest amplitude, unlessthere is a direct impediment to the said power. (ix)The Supreme Court in M/s.Goetze India(supra), had no occasion to deal with the power ofthe Commissioner under Section 264 of the Act. ............. 16. Thus, on facts, the first respondentfound that a company, which is claiming nobusiness activity with no other income other thanrental income and interest income claimingexpenditure on repairs to plant and machinery thattoo in an increasing in manner, clearly indicatesa position otherwise. Further, on facts, the firstrespondent found that the assessee has not beenable to prove with evidence that there has been nobusiness activity during the impugned assessmentyear. Thus, the first respondent having done afactual exercise, in exercise of his power underSection 264 and on facts, found that the theory aspropounded by the petitioner as a keying error tobe not proved conclusively. In such factsituation, the order passed by the firstrespondent calls for no interference.” 6.The above referred order would apply with full force tothe cases on hand. Thus, following the same, these writpetitions are allowed, the impugned orders are set aside and thematters are remanded to the respondent for fresh considerationin accordance with law. No costs. Sd/- Assistant Registrar(CS IX) //True Copy// To Sub Assistant Registrar 1.The Commissioner of Income Tax-VIII,3[rd] Floor, Main Building,121, Nungambakkam High Road,Nungambakkam, Chennai-600 034. 2.The Joint Commissioner of Income Tax Vellore Range, Vellore 3.The Assistant Commissioner of Income Tax,Vellore Range, Vellore +3 ccs to Mr.V.S.Jayakumar Advocate sr 907 +3 ccs to Mr.J.Narayanaswamy Advocate sr 1712,1713 & 1716 W.P.Nos.13211, 13212 & 14368 of 2011 vgI(co) aa30/01/2018