Bahar Infocons Pvt. Ltd. Vs PCIT (Bombay High Court)
In Bahar Infocons Pvt. Ltd. vs. PCIT, the Bombay High Court dealt with the issue of double taxation on excess provisions for bonuses under Section 43B of the Income Tax Act. The petitioner, Bahar Infocons, had initially disallowed excess bonus provisions in its 2018-19 return but inadvertently failed to reduce this amount in subsequent years, leading to double taxation. Upon realizing the error after the time for filing a revised return under Section 139(5) had lapsed, the petitioner filed a revision application under Section 264 to claim the refund of excess tax paid. The Principal Commissioner rejected the application, citing the Supreme Court’s decision in Goetze (India) Ltd. and the lack of a revised return.
The Bombay High Court, however, disagreed with the Commissioner’s stance, noting that Section 264 exists to remedy genuine errors and prevent unjust taxation. The court clarified that Goetze pertains to deductions claimed after the return filing and does not restrict the Commissioner’s revisional powers under Section 264. It emphasized that this provision allows the correction of bona fide mistakes that arise after assessments are completed, especially when a revised return cannot be filed due to time limitations. The court set aside the Commissioner’s rejection, directing the claim to be reconsidered, thereby upholding the taxpayer’s right to seek relief in cases of over-assessment.
