1984 (10) TMI 21 - HC - Income Tax

Summary

Issues Involved:
1. Scope of the revisional jurisdiction of the Commissioner of Income-tax u/s 264 of the Income-tax Act, 1961.
2. Applicability of the doctrine of merger.
3. Bar u/s 264(4) on the Commissioner's jurisdiction to entertain a revision petition.

Summary:

1. Scope of Revisional Jurisdiction u/s 264:
The primary issue was whether the Commissioner of Income-tax could entertain a revision petition u/s 264 of the Income-tax Act, 1961, filed by the assessee against part of the appellate order of the Appellate Assistant Commissioner, while another part of the same order was under appeal before the Income-tax Appellate Tribunal by the Revenue. The Division Bench referred this question to the Full Bench, which concluded that the Commissioner could not entertain the revision petition because the entire order of the Appellate Assistant Commissioner merges into the appellate order, irrespective of the specific points raised or decided.

2. Doctrine of Merger:
The Full Bench examined the doctrine of merger, referencing the Supreme Court decisions in CIT v. Amritlal Bhogilal & Co. [1958] 34 ITR 130 and State of Madras v. Madurai Mills Co. Ltd. [1967] 19 STC 144. It was held that the doctrine of merger is not universally applicable and depends on the nature of the appellate or revisional order and the scope of the jurisdiction conferred by the statute. The Full Bench agreed with the decision in Vijayalakshmi Lorry Service, which held that the entire order merges when taken in appeal and modified by the Appellate Assistant Commissioner.

3. Bar u/s 264(4):
The Full Bench also addressed the express bar u/s 264(4) of the Income-tax Act, which prohibits the Commissioner from revising any order that has been made the subject of an appeal to the Tribunal. The Full Bench held that this bar is absolute and applies irrespective of the relief claimed or the party who preferred the appeal. Therefore, since the Revenue had appealed the order of the Appellate Assistant Commissioner to the Tribunal, the Commissioner was barred from entertaining the revision petition filed by the assessee.

Conclusion:
The Full Bench answered the referred question in the negative, holding that the Commissioner of Income-tax does not have the jurisdiction to entertain the revision petition u/s 264 of the Income-tax Act, 1961, when the order of the Appellate Assistant Commissioner is already the subject of an appeal before the Tribunal. The judgment emphasized the importance of consistency in law and upheld the principle that the entire order merges into the appellate order, thus barring the Commissioner's revisional jurisdiction.