Case Law Details
Puneet Dhanda Vs PCIT (Delhi High Court)
Introduction: In a recent judgment, the Delhi High Court addressed a matter involving Assessment Year (AY) 2018-19, highlighting the significance of Section 264 of the Income Tax Act, 1961. The petitioner, an assessee, filed a writ petition challenging the order passed by the Principal Commissioner of Income Tax (PCIT) rejecting the petitioner’s application for revision under Section 264. The issue at the heart of this case was the correction of a deduction claim that the petitioner had inadvertently overlooked.
1. Application of Section 264: Section 264 of the Income Tax Act provides a provision for the revision of orders that are prejudicial to the interests of the assessee. This revisionary power allows for the correction of errors and adjustments to ensure that the tax assessment aligns with the taxpayer’s actual financial situation.
2. Overlooked Deduction Claim: In this case, the petitioner sought to invoke Section 264 to correct an error in the intimation issued to them under Section 143(1) of the Act. The error pertained to the claim of a loss amounting to Rs. 36,66,650 related to Future and Option contracts. The petitioner had carried on non-speculative business activities during the relevant period, resulting in this loss. However, the petitioner had inadvertently failed to claim the set-off of this loss against income from business and profession.
3. PCIT’s Rejection: The PCIT rejected the application under Section 264, arguing that the intimation issued under Section 143(1) was not prejudicial to the petitioner’s interest. Therefore, the PCIT believed he could not exercise revisionary power under Section 264.
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