Gujarat High Court Remands Income Tax Case for Re-Evaluation

High Court Orders Reconsideration of Senior Citizen's Tax Assessment Denied Due to Technicalities

In a significant ruling, the Gujarat High Court has directed the re-evaluation of a tax assessment case involving an 82-year-old petitioner, Shushilaben Jayantibhai Patel. The petitioner sought relief under Section 264 of the Income Tax Act, 1961, which allows for revisional powers to prevent miscarriage of justice. The High Court found that the Principal Commissioner of Income Tax, Vadodara, had failed to exercise discretion appropriately, denying relief on technical grounds despite mitigating factors such as the petitioner’s age and health conditions.

Shushilaben Patel, a senior citizen suffering from ailments including hypertension and Alzheimer’s disease, had challenged the rejection of her application to revise her tax assessment for the year 2017-18. The rejection was based on her failure to file returns due to inadvertence by her Accountant and Manager. Despite paying the tax amount and submitting Audit Reports, her application was dismissed by the Commissioner.

The High Court Bench, comprising Justices A.S. Supehia and Pranav Trivedi, noted that the Commissioner has wide revisional powers under Section 264, intended to prevent injustice. The court emphasized that discretion must be exercised judicially and positively, without rejecting applications on mere technicalities, especially when mitigating factors are present. The judgment underscored the importance of considering the petitioner’s age and ailments in the decision-making process.

The case references previous judgments, including C.Parikh & Co. v. Commissioner of Income Tax, which outline the Commissioner’s authority to entertain new grounds and provide relief where the law permits. The court criticized the Commissioner for not utilizing these powers effectively and for failing to consider the petitioner’s circumstances adequately.

In its order, the High Court remanded the matter back to the Commissioner for re-examination, instructing that the assessment be revisited in light of the court’s observations. The Commissioner is directed to pass appropriate orders within twelve weeks, ensuring justice is served.

This ruling highlights the judiciary’s role in safeguarding the rights of individuals against procedural rigidity, advocating for a compassionate approach in cases involving vulnerable citizens.

Bottom Line:

Income Tax - Revisional powers under Section 264 of the Income Tax Act, 1961 - Commissioner must exercise discretion judicially and not arbitrarily. Relief to the assessee cannot be denied on technical grounds especially considering mitigating factors like age and ailment.

Statutory provision(s): Section 264, Section 144, Section 156, Section 139 of the Income Tax Act, 1961

Shushilaben Jayantibhai Patel v. Principal Commissioner of Income Tax Vadodara, (Gujarat)(DB) : Law Finder Doc Id # 2808407