Murari Lal Narang Vs PCIT (Delhi High Court)
The Delhi High Court’s decision in the case of Murari Lal Narang vs. PCIT addresses a critical question: can an intimation under Section 143(1) of the Income-tax Act, 1961, be revised under Section 264 of the same Act? This case arose when the petitioner sought to claim an exemption for interest on enhanced compensation received for land acquisition, which had not been claimed in the original tax return. The Principal Commissioner of Income Tax (PCIT) rejected the revision application, prompting a deeper legal examination by the court.
Background
Murari Lal Narang, the writ petitioner, received enhanced compensation for land acquisition and sought to claim an exemption for the interest received under Section 10(37) of the Income-tax Act, 1961. This claim was not made in the original tax return. The petitioner filed a revision application under Section 264 of the Act, aiming to revise the intimation issued under Section 143(1).
PCIT’s Decision
The PCIT denied the revision application, asserting that an intimation under Section 143(1) cannot be considered an order subject to revision under Section 264. The key points of the PCIT’s reasoning were:
1. Purpose of Section 264: This section is intended to correct mistakes in orders passed by subordinate authorities. Since intimation under Section 143(1) is not an order but merely an acknowledgement, it does not fall within the scope of Section 264.
2. Statutory Interpretation: Accepting a belated claim through Section 264 would undermine the deadlines and restrictions imposed by Section 139(5) for filing revised returns. The Supreme Court has also emphasized that revisions to belated returns are not permissible beyond the prescribed dates.
3. Nature of Intimation under Section 143(1): The Explanation (b) below Section 143(1) clarifies that if there is no sum payable or refundable and no adjustments made, the acknowledgement of the return is deemed to be the intimation. Thus, in such cases, intimation cannot be treated as an order.
Court’s Ruling
