1977 (12) TMI 20 - HC - Income Tax

Summary

Issues involved: The issues involved in the judgment are regarding the petitioner's appeal process in response to an ex parte assessment by the Income-tax Officer for the assessment year 1970-71, the rejection of appeals by the Appellate Assistant Commissioner and the Tribunal on grounds of delay, and the subsequent rejection of the revision petition by the Commissioner of Income-tax under section 264 of the Income-tax Act, 1961.

Ex parte assessment and appeal process: The petitioner, engaged in business activities in Madras and Calcutta, did not file a return for the assessment year 1970-71, leading to an ex parte assessment by the Income-tax Officer estimating the total income at Rs. 40,000. The petitioner's appeal before the Appellate Assistant Commissioner was rejected as time-barred by 28 days, and a subsequent appeal to the Tribunal faced a delay as well. The Tribunal, while condoning the delay, upheld the rejection of the appeal by the Appellate Assistant Commissioner, without delving into the merits of the assessment.

Rejection of revision petition: The petitioner then filed a revision petition under section 264 of the Income-tax Act, 1961, before the Commissioner of Income-tax, which was rejected on the grounds that the petitioner had already appealed before the appellate authorities, rendering the revision petition invalid. The Commissioner relied on section 264(4) which restricts revision in cases where an appeal lies to the Appellate Assistant Commissioner or the Appellate Tribunal and has not been made, or where the order is pending on appeal before the said authorities.

Interpretation of section 264 and legal precedents: The court analyzed section 264(4) and referred to legal precedents to determine the scope of revision petitions in cases where appeals have been made to the appellate authorities. Previous decisions highlighted that filing an ineffective or incompetent appeal before the Appellate Assistant Commissioner or Appellate Tribunal does not deprive an assessee of the right of revision under section 264. The court emphasized that the mere challenge of assessment in the grounds of appeal does not make the order passed by the Tribunal conclusive on the entire subject-matter of the appeal.

Decision and conclusion: The court held that the revision filed by the petitioner was maintainable, as the appellate authorities had not dealt with the assessment on merits but rejected the appeals based on delay. The court directed the Commissioner to take up the revision on file and dispose of it on merits, allowing the writ petition with no order as to costs.