2023 (5) TMI 584 - HC - Income Tax

Revision u/s 264 - PCIT rejected the revision on the ground that as the writ petition, filed by the assessee against the order passed initiating reassessment proceedings u/s 143 (3)/147 as pending consideration, in view of the provisions of Section 264 (4) (a) no order can be passed u/s 264 - HELD THAT - From perusal of Sub-section (4) (a) of sec 264 it is clear that Principal Commissioner or Commissioner shall not revise any order which is under challenge in case where an appeal against the order lies to the Deputy Commissioner (Appeals) or to the Commissioner (Appeals) or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired, or, in the case of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal. This Court finds that the order passed by the AO/ITA initiating the reassessment proceedings against assessee was subject to challenge before this Court in which the writ Court had categorically held that the pendency of the writ petition will not cause any embargo or fetter on the part of the concerned authority to proceed in accordance with law. The finding recorded by the respondent no. 1 as to the extent that in view of the provisions of Section 264 (4) (a) of the Act of 1961, if any appeal is pending no order u/s 264 can be passed is a fallacy. The pendency of writ petition before this Court would not amount to pendency of any appeal before any authority. In fact, the writ Court had made it clear that there is no embargo upon the competent authority to proceed in the matter. Once the proceedings were initiated for reassessment by the respondent and the competent authority proceeded to complete the same on 31.12.2019, no occasion arise as to any matter being pending before this Court as the only challenge before the writ Court was for initiation of proceedings under Section 143 (3) read with Section 147 of the Act of 1961. Once the reassessment was made and the proceedings were completed, the writ petition has practically become infructuous. The ground taken by the Principal Commissioner of Income Tax does not hold any ground as the writ petition is not an appeal according to Section 264 (4) (a) of the Act of 1961. The order passed by the Principal Commissioner of Income Tax- I, Agra is unsustainable in the eyes of law and, as such, same is hereby quashed and set-aside. WP allowed.

Summary

Issues involved:
The judgment deals with the challenge to an order passed under Section 264 of the Income Tax Act, 1961 for the assessment year 2012-13, based on the pendency of a writ petition filed by the assessee against the initiation of reassessment proceedings.

Details of the Judgment:

Issue 1: Challenge to the order under Section 264 of the Act
The petitioner challenged the order passed under Section 264 of the Act, contending that the pendency of the writ petition did not amount to an appeal as per Section 264(4)(a) of the Act.

Issue 2: Interpretation of Section 264 of the Act
The Court examined Section 264 of the Income Tax Act, which outlines the provisions for revision of orders, including the limitations on revision in cases where an appeal lies to the Deputy Commissioner (Appeals) or to the Commissioner (Appeals) or to the Appellate Tribunal.

Issue 3: Effect of Writ Petition on Revisional Proceedings
The Court noted that the pendency of the writ petition challenging the initiation of reassessment proceedings did not prevent the competent authority from proceeding with the assessment, as observed by the writ Court earlier.

Decision:
The Court found that the order passed by the Principal Commissioner of Income Tax, rejecting the revision under Section 264, was unsustainable. The Court quashed the order and directed the respondent to continue with the revisional proceedings initiated by the assessee under Section 264, emphasizing the need for expeditious decision-making in accordance with the law.