Madras High Court
Kadri Mills (Coimbatore) Ltd. vs Commissioner Of Income-Tax on 24 November, 1998
Equivalent citations: [2000]243ITR861(MAD)
Author: R. Jayasimha Babu
Bench: R. Jayasimha Babu
JUDGMENT R. Jayasimha Babu, J.
1. The petitioner has sought for quashing the order of the Commissioner of Income-tax rejecting the petitioner's application under Section 264 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for revising the assessment of the petitioner for the assessment year 1980-81. The petition was rejected on the ground that the order of the assessment for that year had been made the subject-matter of the appeal by the assessee/petitioner before the Commissioner of Income-tax (Appeals) and, therefore, the revision petition could not be brought before the Commissioner, having" regard to the prohibition contained in Section 264(4)(c) of the Act.
2. Section 264(4)(c) of the Act prohibits the Commissioner from revising any order under Section 264 of the Act where the order has been made the subject of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal.
3. Learned counsel for the petitioner submitted that in view of the decision of the Supreme Court with regard to the scope of Section 263 of the Act in the case of CIT v. Shri Arbuda Mills Limited [1998] 231 ITR 50, wherein it has been held that the power of the Commissioner under Section 263 of the Act extends to all such matters as had not been considered and decided in the appeal against the order sought to be revised, the term "order" appearing in Section 264(4)(c) of the Act should be construed as referring only to that part of the order which was made the subject-matter of an appeal. Counsel submitted that the fact that the Commissioner's powers had been clarified by Parliament by the addition of the Explanation to Section 263 of the Act it does not make any qualitative difference as both the Sections 263 and 264 of the Act deal with the revisional jurisdiction of the Commissioner and the two sections are required to be interpreted in similar manner. The ground raised in revision was in respect of a matter which had not been made the subject-matter of the appeal that had been preferred by the petitioner.
4. Learned counsel placed strong reliance on the decision of the Gujarat High Court in Digvijay Cement Co. Ltd. v. CIT [1994] 210 ITR 797. The learned judges who decided that case dissented from the decision of this court in the case of C. Gnanasundara Nayagar v. CIT [1961] 41 ITR 375 and relying, inter alia, on the earlier decision of the Gujarat High Court in CIT v. Karamchand Premchand Pvt. Ltd. [1969] 74 ITR 254 held that all that Section 264(4)(c) of the Act contemplates is that order or that part of the order which was made the subject of appeal to the Tribunal and that would obviously not include that part of the order, against which no appeal could have been filed. Counsel also relied on the decision of the Kerala High Court in Mount Senai Hospital v. ITO [1998] 231 ITR 510, wherein it was held that when there was no order in appeal at all in relation to a claim sought to be agitated in revision, the Commissioner was not right in refusing to exercise his jurisdiction, under that provision. The court in that case observed that the reason given by the Commissioner was specious.
5. Learned counsel for the Revenue submitted that the consistent view of this court is that if in respect of the order sought to be made the subject-matter of revision an appeal had been filed against that order, the assessee would be debarred from invoking revisional jurisdiction. Counsel relied on the decision of this court in the case of C. Gnanasundara Nayagar v. CIT [1961] 41 ITR 375, wherein this court held while construing Section 33A(2) of the Indian Income-tax Act, 1922, that in cases where an assessee had filed an appeal against the order sought to be revised, the assessee would be debarred from invoking the revisional jurisdiction of the Commissioner. The court while so holding observed that it was open to the petitioner therein to have claimed the benefit in respect of which the revisional jurisdiction was invoked in the assessment proceedings before the Income-tax Officer and even after having failed to do so, the benefit could have been sought in appeal and after having" failed to do so, it was not open to the assessee to seek the relief in revision. Learned counsel also invited our attention to the decision of this court in the case of CIT v. Indian Express (Madurai) Pvt. Ltd. [1983] 140 ITR 705, wherein this court held that in appeal, additional grounds can be entertained by the Tribunal and even claims for deduction not made before the Income-tax Officer or the Appellate Assistant Commissioner could be entertained by the Tribunal. The view so taken by this court has been approved by the Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383, wherein the court observed that the power of the Tribunal in dealing with the appeals is expressed in the widest possible terms. The apex court in that case disapproved the decision of the Gujarat High Court in the case of CIT v. Karamchand Premchand Pvt. Ltd. [19691 74 ITR 254, which had taken a narrow view of the power of the Tribunal.
6. With due respect to the learned judges who decided the cases relied upon by counsel for the petitioner, we are unable to agree with the view that notwithstanding the prohibition contained in Section 264(4)(c) of the Act, an assessee can still assert a right to invoke revisional jurisdiction, even after having preferred an appeal against the order sought to be revised. The scope of an appeal is very wide. It is open to the assessee to urge all grounds relevant to the assessment including the raising of a claim to which the assessee may be entitled in law, but, which had not been made before the Assessing Officer. The assessee cannot after having failed to utilise the opportunity available to him in appeal to secure relief in relation to the matters which he could have agitated, fall back on the revisional power of the Commissioner, The remedy under Section 264 of the Act is not, in the scheme of the Act, meant to serve as a supplement to the remedy available by way of an appeal to an assessee. The assessee has to make a choice. He has either to choose the appellate forum or revisional forum, and may not avail of both the forums with regard to the same order. If the assessee had chosen to file an appeal, it is for the assessee to seek all its remedies in respect of matters which can be considered by the appellate forum, before that forum. The assessee's omission to do so can not afford a justification for invoking the revisional jurisdiction.
7. Though the power under Section 264 of the Act as also under Section 263 of the Act are vested in the same authority, the circumstances in which the power can be exercised are not identical. Section 263 of the Act is meant to safeguard the interest of the Revenue by vesting in the Commissioner a power to revise the orders which are prejudicial to the Revenue. The Revenue has no right of appeal against the order of assessment or other orders passed by the original authorities under the Act. Unless revisional power is vested in the Commissioner, erroneous orders would remain without any scope for correction. So far as the assessee is concerned, the position is not the same. The assessee has the right of appeal against the original order and in such an appeal, the assessee is enabled to urge all the grounds in relation to the matter which was the subject-matter of the assessment including claims which had not been raised before the Assessing Officer. It is only in cases where the assessee has chosen not to avail of the appellate remedy, the assessee's interests are further protected by enabling the assessee to invoke revisional jurisdiction of the Commissioner. There is, therefore, no denial of the assessee's rights by the imposition of the bar under Section 264(4)(c) of the Act.
8. We are, therefore, unable to agree with the submission on behalf of the petitioner that the impugned order suffers from infirmity, requiring our interference. The writ petition is, therefore, dismissed.