Question And Answer
Subject: Filling of petition u/sec 264 for correcting mistakes happen at the time of filling of Return of Income
Querist: Prerna bora
Answered by:
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Date: December 12, 2021
Query asked by Prerna bora

Assessee is partnership firm engaged in the business of construction and development of housing project. Assessee firm has filed the Return of Income for AY 2018-19, 2019-20 and 2020-21. While filling the Return of Income as per advice of CA, added back the difference in stamp duty valuation and actual consideration u/sec 43CA of the Act.  While making this disallowance, assessee firm has added the difference even though the same is less than 10%. Since the disallowance was huge, assessee firm has uploaded the Return with out making payment of self assessment tax.

All the returns are processed u/143(1A) of the Act and demands are raised.

Whether assessee firm can file petition  u/sec. 264 of the Act for all the 3 years. ?

Whether there is any other remedy ?

Pl guide.


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Answer given by

The assessee can file revision application under section 264 of the Act . One of the most important provisions of the Constitution of India is Article. 265, which provides that “No tax shall be levied or collected except by authority of law“. The collection of tax has to be also within the frame work of law. The Circular No. 14 (XL-35), dt. 11/04/1955, also states that a duty is cast upon the Assessing Officer to assist and aid the assessee in the matter of taxation. Assessing Officers are supposed to advise the assessee and guide them and not take advantage of any error or mistake committed by the assessee or of their ignorance. The function of the Assessing officer is to administer the statute with solicitude for public exchequer with an inbuilt idea of fairness to taxpayers. The scope of the above circular is explained in CIT v. Ahmedabad Keiser-E. Hind Mills Co. Ltd (1981) 128 ITR 486 (Guj.) (HC) (492), Parekh Bros v. CIT (1984) 150 ITR 105 (Ker) (HC) (118 ), Dattatraya Gopal Sathe v. CIT (1984) 150 ITR 460 (Bom.)(HC) (463-464) .Raghavan Nair v. ACIT (2018) 402 ITR 400(Ker.)(HC). Capital gains wrongly shown in the return as taxable. Duty of Assessing Officer to refrain from assessing such income. In case petition is rejected the assessee can file writ before the High Court . In Sharp Tools v. PCIT (2019) 311 CTR 505 /183 DTR 289/ (2020) 421 ITR 90 (Mad.)(HC) the Court held that the powers conferred on the Commissioner under S. 264 of the IT Act, is not only wider in its scope and also intended for the purpose of preventing miscarriage of justice and for providing relief to an Assessee, which he is otherwise entitled to.

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