This case involves three petitions filed by the assessee challenging the rejection of its revision applications under Section 264 of the Income Tax Act, 1961. The dispute arose from the petitioner's claim of double taxation of excess provision for bonus in the assessment years 2019-20, 2020-21, and 2021-22. The petitioner had applied for a revision after realizing that it inadvertently did not reduce the excess bonus provision while computing the income. The Income Tax Commissioner rejected the revision applications on the grounds that the petitioner had not filed a revised return within the statutory time frame. However, the Bombay High Court set aside the order and restored the revision proceedings, holding that the Commissioner had wide powers under Section 264 to correct such inadvertent mistakes, even after the expiry of the time limit to file a revised return under Section 139(5).

1. Introduction (Para 1-2):

   • Three petitions were filed to challenge the Principal Commissioner of Income Tax's order rejecting the revision applications under Section 264.
   • The petitioner sought revision of assessments for the years 2019-20, 2020-21, and 2021-22, where the issue of fact and law was the same.

2. Facts of the Case (Para 3-7):

   • The petitioner declared income and made a provision for bonus and ex-gratia, disallowing excess provision in earlier assessment years. However, it inadvertently did not reduce the excess provision for bonus in subsequent years, leading to double taxation.

3. Filing of the Revision Application (Para 8-9):

   • The petitioner filed a revision application under Section 264 to rectify the mistake after realizing the error while preparing returns for AY 2022-23. A delay condonation request was also filed.

4. Arguments by Petitioner's Counsel (Para 10-11):

   • Dr. K. Shivaram argued that the time limit to file a revised return had expired and that Section 264 was the only remedy available to correct the inadvertent mistake.

5. Revenue's Arguments (Para 12):

   • Mr. Mohanty, representing the revenue, opposed the petitions, citing the decision in Goetze (India) Ltd. vs. CIT, arguing that the petitioner should have filed a revised return.

6. Court's Analysis of Section 264 (Para 13-17):

   • The Court held that Section 264 empowers the Commissioner to correct over-assessments, even where the time limit for filing a revised return has lapsed. The Court cited case laws to support this view, including Selvamuthukumar vs. CIT and Ena Chaudhuri vs. ACIT.

7. Distinguishing Goetze Case (Para 17):

   • The Court found that Goetze (India) Ltd. was not applicable since it dealt with deductions claimed by a letter after filing the return, unlike the present case involving revisional powers under Section 264.

8. Conclusion (Para 18-22):

   • The Court allowed the petition, restoring the revision proceedings to the Commissioner for re-consideration under Section 264 to rectify the mistake. Similar orders were passed for the other two petitions for AY 2020-21 and 2021-22.

Acts and Sections Discussed:

• Income Tax Act, 1961
  • Section 264: Revision of orders not prejudicial to the assessee.
  • Section 139(5): Time limit for filing revised returns.
  • Section 143(1): Intimation of tax assessment.
  • Section 43B: Disallowance of unpaid liabilities.

Ratio:

• The judgment highlights the broad powers conferred under Section 264 to correct errors that lead to over-assessment, even after the time limit for filing revised returns has expired. It emphasizes that the law should prevent unjust taxation and correct human errors in tax computations, upholding fairness in tax administration.

Subjects:

Income Tax, Revision of Assessment, Section 264, Double Taxation

Excess Provision, Section 264 Powers, Income Tax Mistakes, Double Taxation