UNIVERSAL PACKEAGING and2 ORS vs. THE COMMISSIONER OF INCOME TAX -14 and2 ORS

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURI ICTION WRIT PETITION NO. 1475 OF 2012 M/s. Universal Packaging & Ors.

..Petitioners versus The Commissioner of Income Tax­14 ..Respondent ­­­­­­­­ Mr. Jitendra Jain alongwith Mr. Jas Sanghavi i/b PDS Legal for the Petitioners. Mr. Tejveer Singh for the Respondent. ............. CORAM :  S.J.VAZIFDAR & M.S.SANKLECHA, JJ.

DATE :  30th July, 2012. (JUDGMENT PER M.S.SANKLECHA,J) 1 Rule.     By   consent   the   Rule   is   made returnable forthwith and the writ Petition is heard finally. 2 By this petition under Article 226 of the Constitution   of   India,   the   Petitioner   challenges the order of the Commissioner of Income Tax dated 26.03.2012 passed in Revision under Section 264 of SNC 1/6 WP 1475-12.doc CNR No : HCBM020151812012 Uploaded on - 21/08/2020 the Income Tax Act, 1961 ('the Act') as being an order in breach of natural justice. 3 Briefly,   the   facts   leading   to   this petition are as under : a) The Petitioner is a partnership firm engaged in the business of manufacturing corrugated paper boxes, corrugated rolls and sleeves. b) On   30.10.2007,   the   Petitioner   filed its return of income declaring taxable income of Rs. 7.44 lacs after claiming a deduction of Rs.5.83 lacs being the salary paid to its working partners for   the   period   ending   on   31.03.2007   (Assessment year 2007­2008) c) For   the   first   time,   from   the assessment year 2007­2008, the procedure of filing return of income was changed by the respondent from the   manual   to   E­filing. Consequently,   on 30.10.2007,  the  Petitioner's  Chartered  Accountant filed its return of income by E­filing the same on the   Internet.     However,   by   mistake   the   taxable income was declared in the return at Rs.13.27 lacs SNC 2/6 WP 1475-12.doc Uploaded on - 21/08/2020 instead of Rs.7.44 lacs i.e. difference on account of remuneration paid to working partners, which is allowed   as   deduction   not   being   reflected   in   the taxable income. d) On   05.03.2009,   the   Assistant Commissioner   of   Income   tax   issued   an   intimation under   Section   143(1)   of   the   Act,   accepting   the return income at Rs.13.27 lacs and raising a demand of   Rs.1.58   lacs.     On   receipt   of   the   above intimation, the Petitioner filed an application for rectification   under   Section   154   of   the   Act   on 30.03.2009. However, the Assistant Commissioner of Income Tax by order dated 15.12.2011 rejected the rectification  application  on  the   ground  that   the claim   cannot   be   entertained   in   the   absence   of revised return of income, as held by the Supreme Court in the mater of Goetz India reported in 284 ITR 323. e) Therefore,

on 23.01.2012,

the Petitioner   filed   a   Revision   application   under Section 264 of the Act, with the Commissioner of Income Tax, in respect of order dated 15.12.2011. SNC 3/6 WP 1475-12.doc Uploaded on - 21/08/2020 f) On   26.03.2012,   the   Commissioner   of Income   Tax   rejected   the   Petitioner's   Revision Application by stating as under :

“4. I have considered the petition of  the assessee under Section 264. The Assessing   Officer   has   rejected   the assessee's   application   for   rectification under   Section   154   vide   his   order   dated 15.12.2011. As such, the assessee has the option   for   filing   the   appeal   before   the Commissioner   of   Income   Tax   (Appeals). Further,   I   also   do   not   find   any   good reason to revise the order under Section 154 passed by the Assessing Officer. In   view   of   the   above,   the assessee's petition under Section 264 is rejected. 4 Mr.   Jitendra   Jain,   Counsel   for   the Petitioner submits that the order dated 26.03.2012 passed   by   the   Commissioner   of   Income   Tax   is   an order   in   breach   of   principle   of   natural   justice inasmuch as it does not consider the petitioner's Revision application and merely rejects the same on the   ground   that   the   petitioner   has   a   option   of filing an appeal before the Commissioner of Income Tax (Appeals).  It is his submission that when the Petitioner has exercised his right to invoke the juri iction of the Commissioner in revision under SNC 4/6 WP 1475-12.doc Uploaded on - 21/08/2020 Section 264 of the Act, he has necessarily waived his   rights   to   prefer   an   appeal   before   the Commissioner of Income Tax (Appeals). 5 Mr.   Tejveer   Singh,   Counsel   for   the respondent supports the order dated 26.03.2012 of the Commissioner of Income Tax. 6 We find the order dated 26.03.2012 passed by the Commissioner of Income Tax is a non speaking order   inasmuch   as,   it   does   not   consider   the petitioner's case on merits and dismissed the same on   the   ground   that   the   Petitioners   have   an alternative remedy of filing an appeal.  It is well settled   position   in   law   that   one   of   the   basic principle of natural justice is that the Authority concerned   must   pass   a   speaking   order,   so   as   to enable a party to know the reasons, as to why his application is being either accepted or rejected. This giving of reasons also ensures due application of mind to the facts by the Authority concerned. The order dated 26.03.2012 is bereft of reasons and SNC 5/6 WP 1475-12.doc Uploaded on - 21/08/2020 therefore, quashed and set aside.

We direct the Commissioner of Income Tax to dispose of the petitioner's Revision application under   Section   264   of   the   Act,   after   giving   the Petitioner a personal hearing and considering all the relevant contentions raised by the petitioner. 8 The   Petition   is   disposed   of   in   above terms.  No order as to costs. (M.S. SANKLECHA, J.) (S.J.VAZIFDAR, J.) SNC 6/6 WP 1475-12.doc Uploaded on - 21/08/2020 Powered by TCPDF (www.tcpdf.org)