Case Note & Summary
The dispute involved M/s Hindustan Aeronautics Ltd. challenging the dismissal of its revision petition by the Commissioner of Income Tax under Section 264 of the Income Tax Act, 1961. The appellant, a government-owned company, had filed its return for the assessment year 1970-71, which led to an assessment order disallowing certain deductions. Following an appeal to the Appellate Assistant Commissioner, both the appellant and the Revenue filed second appeals before the Income Tax Appellate Tribunal. The appellant later withdrew its appeal to pursue a revision petition, which the Commissioner dismissed, citing lack of power due to the ongoing appeal. The appellant's writ petition was initially successful, directing the Commissioner to consider the revision. However, the Division Bench reversed this, relying on precedent that the Commissioner cannot revise orders subject to appeal. The court reiterated that the entire order merges in the Appellate Tribunal's decision, and thus, the revision petition was not maintainable. The court also noted that while circulars from the Central Board of Direct Taxes are binding, they cannot override Supreme Court or High Court decisions. Ultimately, the Supreme Court dismissed the appeal, affirming the lower court's ruling without costs.
Headnote
A) Income Tax - Revision Powers - Commissioner’s Authority - Income Tax Act, 1961, Section 264 - The court held that the Commissioner has no power to revise any order under Section 264 if the order has been made subject to an appeal to the Appellate Tribunal, irrespective of the relief claimed in the revision. This is because the order of the Appellate Tribunal merges the entire order of the Appellate Assistant Commissioner, and thus, the revision petition cannot be maintained (Paras 1-3).
Issue of Consideration
Whether the Commissioner of Income Tax can entertain an assessee’s revision petition under Section 264 when the order is subject to an appeal before the Appellate Tribunal.
Final Decision
The Supreme Court dismissed the appeal, affirming that the Commissioner had no power to revise the order under Section 264 due to the ongoing appeal before the Appellate Tribunal.
Law Points
- Income Tax Act
- 1961
- Section 264
- revision powers
- circular binding nature
- merger principle
