Rajesh Builders Mumbai v. The Principal Commissioner Of Income Tax And Ors

Digitallysigned bySHAMBHAVISHAMBHAVINILESHNILESHSHIVGANSHIVGANDate:2024.03.2719:58:50+0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.1790 OF 2024 Rajesh Builders MumbaiVersusThe Principal Commissioner of Income Tax And Ors. …Petitioner …Respondents Mr. Mihir C. Naniwadekar, with Ms. Rucha Vaidya & Ruturaj H Gurjar, for Petitioner.Mr. Akhileshwar Sharma, for Respondents-Revenue. CORAM:K. R. SHRIRAM &DR. NEELA GOKHALE, JJ.DATED:26[th] March, 2024 PC:- 1.Petitioner is impugning an order dated 21[st] March 2022 passed by Respondent No.1 under Section 264 of the Income Tax Act, 1961(“the Act”). 2.Petitioner had filed a return of income (“ROI”) for AssessmentYear (“AY”) 2017-18 on 7[th] November 2017 declaring total income atRs.2,61,09,890/-. During the course of assessment proceedings under Section 143(3) of the Act, while considering the 26AS details, it wasobserved there was an entry of Rs.49,30,000/- in the name of P.W.D.Division B and R Datia on which tax deducted at source (“TDS”) ofRs.98,600/- was deducted. Assessee submitted to the AssessingOfficer (“AO”) that the payment does not belong to assessee and there seems to be an error. Despite that, the AO made an addition ofRs.49,30,000/- relying on this entry in 26AS to the return income ofPetitioner and completed assessment proceedings on 26[th] September2019 under Section 143(3) of the Act. Petitioner’s income wasassessed at Rs.3,10,39,890/- 3.Petitioner thereafter followed up with P.W.D. Division, B and RDatia and finally the 26AS was rectified by P.W.D. Division. 4. An application under Section 264 of the Act came to berejected by Respondent No.1 vide an order dated 21[st] March 2022purely on the basis that there was no error in the order dated 26[th]September 2019 passed under Section 143(3) of the Act. Mr.Naniwadekar states, it was within the powers of Respondent No.1 todirect rectification of the assessment order, particularly, in view of thefact that P.W.D. Division rectified form 26AS. This is Petitioner’s maingrievance against the impugned order passed under Section 264 ofthe Act. 5.At the same time, Petitioner has also filed an application underSection 154 of the Act on 24[th] March 2022, which is still pendingbefore the Deputy Commissioner of Income Tax, Circle 27(3)(Mumbai). This application is pending and Petitioner’s apprehensioncannot be faulted that the AO might get influenced by the impugnedorder passed by Respondent No.1. 6.We, therefore, dispose the Petition with following directions: (a)The AO shall dispose Petitioner’s application under Section 154 of the Act on or before 31[st] May 2024. (b)The AO shall not be influenced by any findings by Respondent No.1 in the impugned order under Section 264 of the Act. (c)The AO shall consider the 26AS statement of assessee forAY 2017-18 and pass revised assessment order as rectified, suitably. 7.Before passing any order, the AO shall give personal hearing toPetitioner, a notice whereof shall communicated at-least five workingdays in advance. 8.Petition disposed. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)