Mr. Kunal Verma, a resident individual and partner in a consulting firm, filed his return of income for the assessment year 2026-27 under section…

Mr. Kunal Verma, a resident individual and partner in a consulting firm, filed his return of income for the assessment year 2026-27 under section 139(1). During the previous year 2025-26, he sold listed equity shares through a recognised stock exchange on which Securities Transaction Tax was paid at the time of acquisition and transfer, resulting in long-term capital gains of 68,00,000. On 16.12.2025, he also sold a residential house property for 115 lakhs which he had acquired for 25 lakhs on 31.5.2011. Out of the sales proceed, he invested - 30,00,000 in a new residential house. Share of profit and remuneration from the consulting firm was - 2,50,000 and - 35,00,000, respectively. Such remuneration is fully allowable as deductible u/s 40(b) in the hands of consulting firm. Further, during the year, Mr. Verma purchased a foreign tour package for 28,00,000, on which tax was collected at source under section 206C(1G) and correctly reflected in his Form 26AS; however, he failed to claim credit for such TCS in the return of income and also did not properly disclose the transaction in the relevant schedule. The return was processed under section 143(1), wherein excess tax liability was computed due to incorrect treatment of long-term capital gains, credit for TCS was not allowed, and interest under sections 234A, 234B and 234C was levied. By the time Mr. Verma noticed these errors, the time limit for filing revised return under section 139(5) as well as for seeking rectification under section 154 had expired. Consequently, he filed a revision petition under section 264 before the Principal Commissioner of Income-tax, enclosing contract notes, investment proofs and Form 26AS, and contended that the mistakes were bona fide and had resulted in undue hardship. The Principal Commissioner, however, rejected the revision petition on the ground that once the assessee had consciously offered the income to tax, the return could not be altered by invoking the provisions of section 264. Mr. Kunal Verma is paying tax as per section 115BAC(1A). Cost Inflation Index for F.Y. 2011-12: 184; F.Y. 2025-26: 376 From the information given above, choose the most appropriate answer of MCQs 7 to 11: