CHANDRAKANT J PATEL Vs. V.N. SRIVASTAVA

JUDGEMENT

(1.) By this petition under article 226 of the Constitution of India, the petitioner challenged the order dated March 26, 2001, made by the Commissioner of Income-tax, Baroda, whereby the application filed by the petitioner under section 264 of the Income-tax Act, 1961 ("the Act")/ has been rejected.

(2.) The petitioner, an individual, filed his return of income for the assessment year 1996-97 declaring income of Rs. 7,18,050 wherein the petitioner had offered for tax an amount of Rs. 7,18,050 being an interest on the FCNR deposits. The assessment came to be framed at an income of Rs. 9,52,816. Being aggrieved, the petitioner preferred an appeal before the Commissioner (Appeals) who remanded the matter to the Assessing Officer. During the course of fresh assessment proceedings, the petitioner realised that the interest on the FCNR deposits was exempt under section 10(15)(iv)(fa) of the Act as the status of the petitioner for the purpose of the Act for the assessment year 1996-97 was "not ordinary resident of India". The petitioner, therefore, vide letter dated January 5, 2000, requested the Assessing Officer to exclude the income from his taxable income. The petitioner also preferred a revision application under section 264 of the Act to the respondent for exclusion of the aforesaid income of Rs. 5,35,547 from the assessed income of the petitioner as per the assessment order dated September 8, 1999. Pending the revision, the Assessing Officer framed assessment without referring to the letter filed by the petitioner requesting exclusion of income of Rs. 5,35,547. On October 13, 2000, the petitioner filed a second revision application with the respondent for revising the assessment order dated July 24, 2000, on the ground that the petitioner's request for exclusion of Rs. 5,35,547 was not entertained by the Assessing Officer. However, by the impugned order, the respondent rejected the application filed by the petitioner. Being aggrieved, the petitioner filed the present petition.

(3.) Mr. S. N. Soparkar, learned senior advocate appearing on behalf of the petitioner, submitted that the petitioner being not ordinarily resident in India, was entitled to exemption of interest on the FCNR deposits under the provisions of section 10(15)(iv)(fa) of the Act. It was submitted that at the relevant time, the petitioner, by mistake, had offered the said amount for tax. However, upon noticing the error committed by him, the petitioner had filed the revision application. Inviting attention to the impugned order, it was submitted that the revisional authority has rejected the application mainly on the ground that the petitioner had himself disclosed the amount as his income which, according to the revisional authority, clearly proved that the petitioner was not entitled to the said benefit. It was submitted that the revisional authority has not applied his mind to the fact as to whether the said income was liable to be taxed under the provisions of the Act and had without examining the merits of the case, rejected the revision application simply on the ground that the petitioner had himself disclosed the said amount as his income.