Taxpublishers.in - Monday Corner Answer to the Quiz for the week (28 Apr 2025)

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Quiz for the week (28 Apr 2025): Mitra is engaged in wholesale business. He filed ITR for the assessment year 2024-25 on 10th December, 2024. In April,2025 he noticed that he had credited agricultural income in the profit and loss account and omitted to exclude the same while computing his total income. Thus, he had paid tax on total income which included agricultural income. Suggest possible course of action to Mitra in order to set right his position. Best Answer : From the facts given in the question, it is apparent that the agricultural income was offered as regular income and income tax was paid. The assessee now wants refund of tax by adopting agricultural income only for rate purposes. The ITR was filed on 10th December, 2024 and the possibility of filing a revised ITR is ruled out since the assessee realized his folly only in April, 2025. Further, the possibility of filing updated return under section 139(8A) is also ruled out since the ITR filed in pursuance of the provision would result in refund which is a disqualification. Hence, the assessee can neither file a revised ITR nor file an updated return. The only choice available to the assessee is to file a revision application under section 264. Section 264 says that the Pr.CCIT or CCIT or PCIT or CIT may either of his own motion or on an application by the assessee for revision, call for the record of any proceedings under the Act in which any such order is passed and may make any such enquiry or cause such enquiry to be made and subject to the provisions of the Act, may pass such order thereon, not being an order prejudicial to the assessee. The time limit for passing the order of his own motion is one year from the date of the assessment order. Where the assessee has filed an application for revision under section 264 the time limit for passing the revision order is one year from the end of the financial year in which such application is made for revision by the assessee. The Pr.CCIT or CCIT or PCIT or CIT shall not revise any order which is pending on appeal before the JCIT (Appeals) or CIT (Appeals) or the ITAT. Similarly, revision of an order cannot be made where an appeal against the order lies to the JCIT(Appeals) or CIT (Appeals) or ITAT but has not been made and the time within which such appeal may be made has not expired and the assessee has not waived his right of appeal. In this case, the revised return could not be filed nor filing of updated return is possible. The assessee has to seek revision of order under section 264 by citing that the exempted income which was inadvertently admitted as income and the tax was paid. For this purpose, one may refer the apex court decision in the case of Goetz India Ltd v. CIT 2006 TaxPub(DT) 1528 (SC) : (2006) 284 ITR 0323 : (2006) 204 CTR 0182 : (2006) 157 TAXMAN 0001. The assessee therefore has to file a revision petition under section 264 for revising the assessment order and for refund of tax notwithstanding that the taxpayer had committed the error by himself by admitting exempt income as regular income and paid tax thereon.

Quiz for the week (28 Apr 2025):

Mitra is engaged in wholesale business. He filed ITR for the assessment year 2024-25 on 10th December, 2024. In April,2025 he noticed that he had credited agricultural income in the profit and loss account and omitted to exclude the same while computing his total income. Thus, he had paid tax on total income which included agricultural income. Suggest possible course of action to Mitra in order to set right his position.

Best Answer :

From the facts given in the question, it is apparent that the agricultural income was offered as regular income and income tax was paid. The assessee now wants refund of tax by adopting agricultural income only for rate purposes. The ITR was filed on 10th December, 2024 and the possibility of filing a revised ITR is ruled out since the assessee realized his folly only in April, 2025. Further, the possibility of filing updated return under section 139(8A) is also ruled out since the ITR filed in pursuance of the provision would result in refund which is a disqualification. Hence, the assessee can neither file a revised ITR nor file an updated return.

The only choice available to the assessee is to file a revision application under section 264. Section 264 says that the Pr.CCIT or CCIT or PCIT or CIT may either of his own motion or on an application by the assessee for revision, call for the record of any proceedings under the Act in which any such order is passed and may make any such enquiry or cause such enquiry to be made and subject to the provisions of the Act, may pass such order thereon, not being an order prejudicial to the assessee.

The time limit for passing the order of his own motion is one year from the date of the assessment order. Where the assessee has filed an application for revision under section 264 the time limit for passing the revision order is one year from the end of the financial year in which such application is made for revision by the assessee.

The Pr.CCIT or CCIT or PCIT or CIT shall not revise any order which is pending on appeal before the JCIT (Appeals) or CIT (Appeals) or the ITAT. Similarly, revision of an order cannot be made where an appeal against the order lies to the JCIT(Appeals) or CIT (Appeals) or ITAT but has not been made and the time within which such appeal may be made has not expired and the assessee has not waived his right of appeal.

In this case, the revised return could not be filed nor filing of updated return is possible. The assessee has to seek revision of order under section 264 by citing that the exempted income which was inadvertently admitted as income and the tax was paid. For this purpose, one may refer the apex court decision in the case of Goetz India Ltd v. CIT 2006 TaxPub(DT) 1528 (SC) : (2006) 284 ITR 0323 : (2006) 204 CTR 0182 : (2006) 157 TAXMAN 0001.

The assessee therefore has to file a revision petition under section 264 for revising the assessment order and for refund of tax notwithstanding that the taxpayer had committed the error by himself by admitting exempt income as regular income and paid tax thereon.