IMPORTANT POINT
The court established that the Commissioner has the authority to rectify inadvertent mistakes in tax assessments under Section 264, even after the time limit for revised returns has expired.

JUDGMENT :

G.S. Kulkarni, J.

1. Rule, made returnable forthwith. Heard finally by consent of the parties. These are three petitions filed by the petitioner/assessee, assailing the orders passed by the Principal Commissioner of Income Tax under Section 264 of the Income Tax Act, 1961 (for short ‘the Act’), whereby the petitioners’ revision applications filed against the intimation under Section 143(1) of the Act for the Assessment Years 2019-20, 2020-21 and 2021-22 are rejected. As the issues of law and fact are common except for the amounts being different, the petitions are being disposed of by this common judgment.

2. Writ Petition no.2664 of 2024 which is for the Assessment year 2019-20 is argued as the lead matter, hence, we refer to the facts of the said case.

3. The petitioner filed its return of income for the Assessment year 2019-20 declaring income of Rs.1,89,71,207/-. It is the petitioner’s case that the petitioner was making a provision for bonus, ex-gratia and incentives (collectively referred as ‘bonus’) payable to employees, at the time of preparation of the financial statements. It is stated that the actual payment was dependent on various factors, and on an aggregate basis the amount could be lower or equal to the provisions made. The petitioner contends that in the previous year the petitioner Company had made provision of Rs.1,30,00,000/- in the accounts for payment of bonus, and factually paid bonus of Rs.1,18,62,953/- before the due date of filing return of income, for the assessment year 2018-19, and thus disallowed excess provision of Rs.11,37,047/- in the return of income for the assessment year 2018-19 under Section 43B of the Act. The computation of income is placed on record at Exhibit B.

4. It is contended that such excess provision of Rs.11,37,047/- made in the assessment year 2018-19 had been written back by crediting to the salary account in the year under consideration, that is in the year relevant to assessment year 2019-20. This position is pointed out to us from the ledger account annexed at Exhibit C.

5. The petitioner, however, contends that while computing the income for the assessment year 2019-20, inadvertently, the excess provision of Rs.11,37,047/- was not reduced from the income which resulted in double taxation of excess provision. The calculation of the said amount is as under :

6. It is thus stated that the excess provision of Rs.11,37,047/- which was written back in Assessment Year 2019-20, and credited to salary account, however was not adjusted, from the income returned.

7. The petitioner’s return of income for Assessment Year 2019-2020 was processed by respondent No 2. An intimation under Section 143(1) was received by the petitioner on 4 December 2019, accepting the returned income. It is the petitioner’s case that while preparing the return of income for Assessment Year 2022-2023, the petitioner realized the inadvertent mistake of double taxation of excess provision for bonus in Return of income for Assessment Years 2019-2020, 2020-2021 and 2021-2022.

8. In the aforesaid circumstances, the petitioner filed an application for revision under Section 264 against the intimation under Section 143(1) dated 4 December 2019 on 7 November 2022 with a view to reduce the excess provision of Rs.11,37,047/- from the returned income. The petitioner also filed an application dated 17 February 2023 for condonation of delay. In the said proceedings, the petitioner placed on record a chart showing summary of bonus provisions written back relevant to the Assessment Years along with an explanation in brief.

9. Respondent No.1 considered the petitioner’s case, however, by the impugned order dated 23 February 2024 by rejecting the petitioner’s applica