By TIOL News Service

MUMBAI, MAR 15, 2019: THE ISSUE BEFORE THE DIVISION BENCH IS - Whether when assessee had any dispute with the Department accepting his return as per declaration made in it, then assessee had to file an appropriate revision application before the CIT within a period of one year thereafter. YES IS THE VERDICT.

Facts of the case:

The assessee is an individual and member of a partnership firm from which, he retired on May 23, 2005. Thereafter, the assessee filed his return for the A.Y 2007-2008 in which he had included a sum of Rs.51.96 lacs which was received by him on retirement from the said partnership firm towards his share in goodwill. Such return was accepted by the AO u/s 143(1) without scrutiny. Later on, the assessee filed a revision application before the CIT against the said order of assessment, and requested that the amount of Rs.51.96 lacs be deleted from computation of his taxable income for A.Y 2007-08. In such revision petition, the assessee had stated that intimation u/s 143(1) was not served on him and that therefore, there was no delay on his part in filing the revision application. However, the CIT dismissed the revision on the ground that the revision application was filed much beyond the period of limitation prescribed.

High Court held:

++ the question in the present petition, is one of limitation in filing the revision petition before the CIT. Section 264(3) envisages the period of limitation of one year for filing a revision application from the date on which, the order under revision is communicated to the applicant or which he otherwise came to know of it, or whichever is earlier. This period of limitation thus, commences not from the date of the order but, from the date of its communication or knowledge whichever is earlier. In the present case, it is not disputed that once the assessee filed his return, the scrutiny assessment thereof, would become time barred upon expiry of the period prescribed under the statute. In the circumstances, the knowledge that the Department does not propose to take the return for scrutiny assessment, can be attributed to the assessee;

++ if the assessee had any dispute with the Department accepting his return as per declaration made in it, the assessee had to file an appropriate revision application before the CIT within a period of one year thereafter, and at any rate, explaining the delay caused in filing such a revision application beyond the said period. In the present case, the revision application was filed seven years later. By no stretch of imagination, such long period can be ignored. The assessee simply, cannot take shelter of non-communication of the intimation or acceptance u/s 143(1). If, the assessee wanted to dispute his own declaration in the return, he had to take appropriate steps before the CIT within the period of limitation prescribed which in the present case, is not done.

(See 2019-TIOL-589-HC-MUM-IT)