HAREN TEXTILES PRIVATE LIMITED vs. PRINCIPAL COMMISSIONER OF INCOME TAX-4 AND ANR

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WP/1100/2021HC Bombay08 September 2021Author: HON'BLE SHRI JUSTICE K.R. SHRIRAM, HON'BLE SHRI JUSTICE ABHAY AHUJA8 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the Principal Commissioner of Income-Tax was not correct in rejecting the revision petition on the ground of a bar under Section 270AA(6) of the Income Tax Act, 1961. The Court reasoned that Section 270AA(6) only prohibits appeals under Section 246A or revision applications under Section 264 against the order of assessment or reassessment when an application under Section 270AA(1) has been accepted. It does not provide a bar against challenging an order passed by the Assessing Officer rejecting an application made under Section 270AA(1) seeking immunity from penalty. Therefore, the impugned order of the PCIT was set aside. The matter was remanded back to the PCIT to consider the Section 264 application de novo, after granting a personal hearing to the Petitioner, and to pass orders in accordance with law within six weeks.

What were the facts?

The Petitioner, Haren Textiles Private Limited, is challenging an order dated March 18, 2021, passed by the Principal Commissioner of Income-Tax (PCIT), Mumbai-4. This order rejected a revision petition filed under Section 264 of the Income Tax Act, 1961. The revision petition itself challenged an order passed by the Assistant Commissioner of Income-Tax (ACIT) under Section 270AA(4) of the Act. The assessment year in question is 2017-2018. The ACIT had initially passed an assessment order determining the total income at Rs.7,41,84,730/-. Following rectification for MAT credit, a revised demand of Rs.57,356/- was raised, which the Petitioner paid. Subsequently, the Petitioner applied for immunity from penalty under Section 270AA, which was rejected by the ACIT on February 28, 2020. The PCIT rejected the subsequent revision petition on the grounds of a statutory bar under Section 270AA(6).

What were the issues?

1. Whether the Principal Commissioner of Income-Tax was correct in rejecting the revision petition filed under Section 264 of the Income Tax Act, 1961, on the ground that Section 270AA(6) of the Act prohibits revisionary proceedings against an order passed by the Assessing Officer under Section 270AA(4) of the Act. Assessee's Contention: The Petitioner argued that Section 270AA(6) does not create a bar against challenging an order rejecting an application filed under Section 270AA(1). The revision petition was against the rejection order of the ACIT, not the original assessment order. Revenue's Contention: The Revenue contended, through the PCIT's order, that Section 270AA(6) specifically prohibits revisionary proceedings under Section 264 against an order passed by the Assessing Officer under Section 270AA(4).

Which sections of the Income-tax Act were involved?

Section 270AA,Section 264,Section 143(3),Section 156,Section 154,Section 270A,Section 276C,Section 276CC,Section 246A,Section 143,Section 147,Section 249

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
Dusane 1/8 23 wp 1100.2021.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY APPELLATE JURISDICTION WRIT PETITION NO.1100 OF 2021 Haren Textiles Private Limited having business address at Opp. Civil Aviation Department, Near Dahisar Check Naka, Western Express Highway, Dahisar (East) – 400 068 P.A. No. AAACH3166K .... Petitioner Vs. 1 Principal Commissioner of Income-Tax 4, having his office at Room No. 629, 6th Floor, Aaykar Bhavan, Maharshi Karve Road, Mumbai – 400 020 email : mumbai.pcit4@incometax.gov.in …. Respondent no.1 2. Assistant Commissioner of Income-Tax, Circle 12(2), having his office at Room No. 145, 1st Floor, Aaykar Bhavan, Maharshi Karve Road, Mumbai – 400 020 email : mumbai.dcit12.2.2@incometax.gov.in …. Respondent no.2 Mr. Jintendra Singh for Petitioner Mr. Sham V. Walve for Respondents-Revenue CNR No : HCBM020103542021 Uploaded on - 14/09/2021 Downloaded on - 31/10/2026 01:33:05 Dusane 2/8 23 wp 1100.2021.doc Coram : K.R. SHRIRAM & ABHAY AHUJA, JJ Date : 8th SEPTEMBER, 2021

JUDGMENT (Per K.R. SHRIRAM, J.) :

1.

Petitioner is impugning an order dated 18th March, 2021 passed by Respondent No. 1, i.e., Principal Commissioner of Income- Tax (PCIT), Mumbai- 4 rejecting a Revision Petition filed under Section 264 of the Income Tax Act, 1961 (“The Act”) impugning the order passed by the Assessing Officer under Section 270 AA(4) of the Act.

2.

Petitioner, who is engaged in the business of manufacturing and selling fabrics and also a trading member in the National Stock Exchange filed its Return for the Assessment Year 2017-2018 on 31st October, 2017 declaring total income of Rs.2,27,11,320/-. Respondent No. 2, i.e., the Assistant Commissioner of Income-Tax initiated scrutiny assessment by issuing statutory notices under Sections 143(2) and 142(1) of the Act. Petitioner replied to these notices from time to time and also furnished all details and documents. Respondent No. 2 passed an Assessment order dated 19th December, 2019 under Section 143 (3) Uploaded on - 14/09/2021 Downloaded on - 31/10/2026 01:33:05

Dusane 3/8 23 wp 1100.2021.doc of the Act determining total income of Petitioner at Rs.7,41,84,730/-. Respondent No. 2 determined book profit under the provisions of Section 115 (JB) of the Act at Rs.2,19,33,505/-. Following this assessment order, Respondent No. 2 issued demand notice dated 19th December, 2019 under Section 156 of the Act raising a demand of Rs.1,80,14,619/-. As Petitioner found that Respondent No.2 had not correctly allowed the Minimum Alternate Tax (M.A.T.) credit available to Petitioner while determining the tax liability, Petitioner filed an application dated 6th January, 2020 under Section 154 of the Act seeking rectification of the assessment order. Respondent No.2 accepted the submissions of Petitioner and granted M.A.T. credit available to Petitioner and issued the revised Computation Sheet dated 14th January, 2020 determining the correct amount of tax liability of Petitioner. Respondent No. 2 also issued revised notice of demand dated 14th January, 2020 under Section 156 of the Act raising demand of Rs.57,356/- payable within 30 days from the service of the said notice. Uploaded on - 14/09/2021 Downloaded on - 31/10/2026 01:33:05

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3.

Petitioner accepted the order passed by Respondent No. 2 under Section 154 of the Act and on 29th January, 2020 paid fully the tax demand determined at Rs.57,356/-. This amount was paid.

4.

Thereafter, Petitioner on 30th January, 2020 filed an application under Section 270 (AA) of the Act in the prescribed Form No. 68, before Respondent No. 2 seeking immunity from penalty etc. This application was rejected by Respondent No. 2 by an order dated 28th February, 2020. Aggrieved by this order, Petitioner filed an application dated 18th December, 2020 before Respondent No.1 under the provisions of Section 264 of the Act. Respondent No. 1, rejected Petitioner’s application on the ground that Sub-Section 6 of Section 270 (AA) specifically prohibits revisionary proceedings under Section 264 of the Act against the order passed by Assessing Officer under Section 270 (AA)(4) of the Act. It is this order which is challenged by Petitioner. Mr. Singh submits that there is no such prohibition or bar as held by Respondent No. 1 and we would agree with Mr. Singh. Uploaded on - 14/09/2021 Downloaded on - 31/10/2026 01:33:05

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5.

It will be useful to reproduce Section 270 (AA) of the Act, which reads as under : 270AA. (1) An assessee may make an application to the Assessing Officer to grant immunity from imposition of penalty under section 270A and initiation of proceedings under Section 276C or Section 276CC, if he fulfils the following conditions, namely:- (a) the tax and interest payable as per the order of assessment or reassessment under sub-section (3) of Section 143 or Section 147, as the case may be, has been paid within the period specified in such notice of demand; and (b) no appeal against the order referred to in clause (a) hasbeenfiled. (2) An application referred to in Sub-Section (1) shall be made within one month from the end of the month in which the order referred to in clause (a) of Sub-Section (1) has been received and shall be made in such form and verified in such manner as may be prescribed. (3) The Assessing Officer shall, subject to fulfilment of the conditions specified in Sub-Section (1) and after the expiry of the period of filing the appeal as specified in clause (b) of sub-section (2) of Section 249, grant immunity from imposition of penalty under Section 270A and initiation of proceedings under Section 276C or Uploaded on - 14/09/2021 Downloaded on - 31/10/2026 01:33:05

Dusane 6/8 23 wp 1100.2021.doc Section 276CC, where the proceedings for penalty under Section 270A has not been initiated under the circumstances referred to in Sub-Section (9) of the said Section270A. (4) The Assessing Officer shall, within a period of one month from the end of the month in which the application under Sub-Section (1) is received, pass an order accepting or rejecting such application: Provided that no order rejecting the application shall be passed unless the assessee has been given an opportunity

of being

heard. (5) The order made under Sub-Section (4) shall be final. (6) No appeal under Section 246A or an application for revision under Section 264 shall be admissible against the order of assessment or reassessment, referred to in clause (a) of Sub-Section (1), in a case where an order under Sub-Section (4) has been made accepting the application.

6.

Under Sub-Section 6 of Section 270 AA, no appeal under Section 246 (A) or an application for revision under Section 264 shall be admissible against the order of assessment or re-assessment referred to in Clause (a) of Sub-Section 1, in a case where an order under Sub- Section 4 has been made accepting the application. This only means Uploaded on - 14/09/2021 Downloaded on - 31/10/2026 01:33:05

Dusane 7/8 23 wp 1100.2021.doc that when an assessee makes an application under Sub-Section 1 of Section 270 AA and such an application has been accepted under Sub- Section 4 of Section 270 AA, the assessee cannot file an appeal under Section 246 (A) or an application for revision under Section 264 against the order of assessment or re-assessment passed under Sub- Section 3 of Section 143 or Section 147. This does not provide for any bar or prohibition against the assessee challenging an order passed by the Assessing Officer, rejecting its application made under Sub- Section 1 of Section 270 AA. The application before Respondent No.1 was an order challenging an order of rejection passed by Respondent No. 2 of an application filed by Petitioner under Sub-Section 1 of Section 270 AA seeking grant of immunity from imposition of penalty and initiation of proceedings under Sub-Section 276( C) or Section 277 (CC).

7.

Therefore, in our view, Respondent no. 1 was not correct in rejecting the application on the ground that there is a bar under Sub- Section 6 of Section 270(AA) in filing such application. The impugned order has to be set aside and it is hereby set aside. Uploaded on - 14/09/2021 Downloaded on - 31/10/2026 01:33:05

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8.

The matter is remanded back to Respondent No. 1 to consider de-novo, the application filed by Petitioner under Section 264 impugning the order passed by the Assessing Officer under Sub-Section 4 of Section 270 AA and pass such orders as he deems fit in accordance with law after granting personal hearing to Petitioner. If Respondent No. 1 requires any further documents to be submitted by Petitioner, he shall cause to be served a communication upon Petitioner atleast one week before the date fixed for personal hearing.

9.

Ordered accordingly. Petition disposed.

10.

Respondent No.1 shall complete the process mentioned above in paragraph 8 and pass a reasoned order within six weeks from today. ( ABHAY AHUJA, J.) ( K.R. SHRIRAM, J.) Uploaded on - 14/09/2021 Downloaded on - 31/10/2026 01:33:05 Powered by TCPDF (www.tcpdf.org)

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