2022 (3) TMI 535 - HC - Income Tax

Revision u/s 264 - CIT refused to admit the application - Huge tax demand is pending - subsequent order under Section 154 Arising out of the assessment order passed under Section 143 (3) relating to assessment year 2018-19 wherein taxable amount was determined and it is admitted position that till date petitioner has not paid a single penny in respect of the aforesaid demand - second round of litigation initiated by the petitioners before this Court - HELD THAT - It is a well-settled principle of law that power of Appellate Authority is much wider than the Revisional Authority and the Commissioner in exercise of his discretionary power of revision u/s 264 of the Act cannot act as an Appellate Authority and go into the merits of the assessment by re-appreciating the facts and evidence and all materials - in view of Explanation I below Section 264 (7) clearly says that any order of the Commissioner u/s 264 of the Act declining to interfere will be deemed not to be an order prejudicial to the assessee. Petitioners after dismissal of the earlier petition by this Court against the same assessment order without filing any statutory Appeal before the CIT (Appeals) with sole intention of avoiding the payment of huge amount of tax determined in assessment order have deliberately chosen the forum of revision under Section 264 of the Act with a view to make out a case to come up before this Court again under Article 226 of the Constitution of India tactfully indirectly to get interference in assessment order which the Commissioner in exercising the power under Section 264 of the Act has refused and this Court has also refused in the first round of litigation.

Summary

Issues:
Challenge to impugned order under Section 264 of the Income Tax Act, 1961 and subsequent order under Section 154 arising from assessment order under Section 143(3) for assessment year 2018-19.

Analysis:
The petitioners challenged the impugned order of the Commissioner dated 15th December, 2021, under Section 264 of the Income Tax Act, 1961, and a subsequent order under Section 154 dated 17th January, 2022, related to the assessment order passed under Section 143(3) dated 14th June, 2021, for the assessment year 2018-19, where a taxable amount of ?22,03,56,600 was determined. The petitioners had not paid any amount towards the demand. This was the second round of litigation initiated by the petitioners before the High Court.

In the first round of litigation, a writ petition was dismissed by the court without going into the merits of the assessment order. The court highlighted that the Commissioner of Income Tax (Appeal) has wide powers to review both facts and questions of law, which the petitioners failed to utilize. Despite the availability of the statutory Appellate Forum, the petitioners chose to invoke Section 264 for revision, which is not appealable, even though there was no limitation to file an appeal at that time.

The court emphasized that the power of the Appellate Authority is broader than the Revisional Authority. The Commissioner, in exercising the discretionary power of revision under Section 264, cannot act as an Appellate Authority to re-evaluate facts and evidence. The court referred to Explanation I below Section 264(7) of the Income Tax Act, which states that an order declining to interfere will not be deemed prejudicial to the assessee.

The court observed that the petitioners, after the dismissal of the earlier petition, chose to avoid paying the tax determined in the assessment order by opting for revision under Section 264. The court noted that the petitioners were attempting to tactfully seek interference in the assessment order through the court, which both the Commissioner and the High Court had previously refused.

Considering the facts, circumstances, submissions of the parties, and the conduct of the petitioners, the court declined to entertain the writ petition and dismissed it.