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Issues:
Challenge to orders P-1 and P-4 under Income-tax Act - Maintainability of revision petition under section 264 - Interpretation of "subject of an appeal" - Jurisdiction of Commissioner to revise orders - Effective disposal of appeal - Applicability of precedent cases. Analysis: The petitioner sought to quash orders P-1 and P-4 under the Income-tax Act, contending that additions to income were unjustified. The main issue was the maintainability of the revision petition under section 264. The petitioner argued that a revision is permissible when an appeal is dismissed in limine without considering merits. The petitioner relied on Circular No. 367, stating an order is not "subject of an appeal" if disposed of without considering merits. The Revenue contended that the case falls under section 264(4)(a) as the petitioner did not waive the right to appeal and the appeal was disposed of on merits. The Revenue further argued that P-1 merged with P-4, removing jurisdiction for revision. The court analyzed the term "subject of an appeal," emphasizing that an appeal must be considered and disposed of on merits to fall within this definition. Citing the Supreme Court's decision in Board of Revenue v. Raj Brothers Agencies, it was held that an appeal dismissed for reasons like incompetence or limitation is not "subject of an appeal." The court also referred to the case of Chiranjilal Daga v. CIT, where an ineffective appeal did not bar revision under section 264. In this case, the Commissioner of Income-tax (Appeals) and the Appellate Tribunal did not effectively dispose of the petitioner's appeal, as P-2 and P-3 orders were based on non-payment of admitted tax, not the merits of the case. Therefore, the first respondent had jurisdiction to revise the order. Despite the Revenue's reliance on CWT v. Mrs. Kasturbai Walchand, the court upheld the petitioner's argument based on previous decisions interpreting "subject of an appeal" as an effective appeal. Consequently, the court allowed the petition, quashed orders P-1 and P-4, and directed the first respondent to reconsider the revision petition in accordance with the law. No costs were awarded in the judgment.
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