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TMI Blog1978 (1) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... to a Madrasa. Aggrieved by the said assessments, the petitioner filed revision petitions before the first respondent under section 34 of the Act on September 24, 1974. These revision petitions were, however, returned by the first respondent with an endorsement dated October 3, 1974, that as there was no time for him to pass orders on the revision petitions within the period of three years prescribed under section 34(2)(c) he was obliged to return the revision petitions. The said action of the first respondent returning the revision petitions has been challenged in these writ petitions on the ground that it is patently wrong, illegal and unsustainable in law. The petitioner's contention is that once an application for revision is filed under section 34 within three years from the date of the order sought to be revised, the revisional authority has to entertain the revision petition and deal with it on merits, that the view taken by the first respondent that final orders in the revision petitions have to be passed within three years is erroneous, and that the said section merely prescribes the time-limit for invoking the revisional jurisdiction and not for passing final orders in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appears to be based on a decision of this court in M. V. P. C. Ramaswami Naicker v. State of Madras [1968] 69 ITR 420 (Mad). The petitioner challenges the correctness of the said view in these writ petitions on the basis of the decision of an earlier Division Bench in N. V. S. Kadirvel Nadar v. State of Madras [1962] 46 ITR 251 (Mad), which has held that the period of limitation provided for in clause (c) of section 34(2) is only for initiating or setting in motion the revisional proceedings and not for the termination of the said proceedings. Therefore, we have to see which of the conflicting views is the correct one. It cannot be disputed that the power of revision under section 34(1) can be exercised by the Commissioner himself suo motu or on an application by the assessee and the period of limitation provided in clause (c) of sub-section (2) is the same for both. Therefore, the said clause has to be construed in such a manner as to give full amplitude to the power of revision contained in sub-section (1) and, whatever be the construction, it must apply to both kinds of revision. The nature of the limitation contained in clause (c) of sub-section (2), whether it is limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at, therefore, section 34 of the Act which fixes three years as the period of limitation applies both to the Commissioner as well as to the assessee, that, therefore, so long as the proceedings have commenced within the period fixed, the power of the Commissioner can be exercised at any time thereafter, and that it is not necessary that the power should be exercised within the period. The learned judges appear to have contemplated a situation where even though an assessee may file an application for revision sufficiently early, the revisional authority may so delay the disposal of the revision petition for a period of three years and then reject the application on the ground that no order in revision could be passed after the expiry of the said period and with reference to such a situation they observed that the right of the assessee to obtain relief by applying for revision should not depend on the hazard of the revising authority disposing of the matter within a particular period and cannot be defeated by the failure of the authority to discharge the statutory functions. Thus, in this decision the time limit prescribed in clause (c) of sub-section (2) has been taken as the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee's application preferred in time would be easily defeated by mere inaction on the part of the revising authority. In our opinion, such a result would not merely be anomalous but would really be calculated to prejudice the assessee's rights quite unjustly." A similar view has been expressed by a Division Bench of the Mysore High Court in Subba Rao v. Commissioner of Commercial Taxes [1967] 19 STC 257. In that case the scope of section 21(2) and (3) of the Mysore Sales Tax Act, 1957, came up for consideration. Section 21(2) said: " The Commissioner suo motu may call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by any officer subordinate to him for the purpose of satisfying himself as to the legality or propriety of such order, or as to the regularity of such proceeding, and may pass such order with respect thereto as he thinks fit." Section 21(3) said: "........ that the power of revision provided for in sub-section (2) shall be exercisable only within a period of four years from the date of order.........." Construing the said section, Hegde J. (as he then was), speaking for the Bench, observed : "Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides for a limitation for the Commissioner's exercise of his revisional powers, the following observations in Muthiah Chettiar v. Commissioner of Income-tax [1951] 19 ITR 402, 405 (Mad) have been referred to-See [1968] 69 ITR 420, 424 (Mad): " Plausible though this argument may be, so far as sub-section (1) of section 33A is concerned, we are of opinion that it is not sound so far as the right given to the party aggrieved under sub-section (2) is concerned. In a case falling under sub-section (1) the Commissioner acts of his own motion. There is no question of the aggrieved party invoking his jurisdiction ...... It may be said that the Commissioner's power to call for the record ceases with the lapse of one year from the date of the order by the subordinate authority. But in a case falling under sub-section (2) the party aggrieved has got to take the step of applying for revision and he is allowed one year from the date of the order. The provision is, therefore, certainly in the nature of a time limit for the application for revision." Referring to the decision of the earlier Bench in N. V. S. Kadirvel Nadar v. State of Madras [1962] 46 ITR 251, 425 (Mad), the Bench observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , despite the phraseology employed in rule 33, the principle which has been laid in other cases relating to analogous provisions in sales tax statutes must be followed as otherwise the purpose of a provision like rule 33 can be completely defeated by taking certain collateral proceedings and obtaining a stay order or by unduly delaying assessment proceedings beyond a period of three years. The Supreme Court referred to its earlier decisions in State of Punjab v. Tara Chand Lajpat Rai [1967] 19 STC 493 (SC) and State of Punjab v. Murlidhar Mahabir Parshad [1968] 21 STC 29 (SC) as laying down the correct principle while dealing with the analogous provisions. In State of Punjab v. Tara Chand Lajpat Rai [1967] 19 STC 493 (SC) the court was considering the scope of sub-sections (4) and (5) of section 11 of the Punjab General Sales Tax Act, 1948. It was held in that case that if a dealer furnishes a return under sub-section (1) or when a notice is issued to him under section 11(2) by the assessing authority within the prescribed period, the assessment can be finalised subsequently even after the expiry of the period and no question of limitation would arise. In State of Punjab v. Murli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar v. Sale of Madras [1963] 14 STC 839 (Mad), in preference to the view expressed in M.V.P.C. Ramaswami Naicker v. State of Madras [1968] 69 ITR 420 (Mad), which, in our view, is not correct as already stated. Section 34(1) provides for revision at the instance of both the revenue and the assessee. Though the phraseology used in section 34(2)(c) can be interpreted to provide a time limit for finalisation of the assessment by the Commissioner in exercise of his power of suo motu revision, such interpretation fails in the matter of revision at the instance of the assessee. Take a case where the assessee files a revision on the next day after the order sought to be revised was passed. The revisional authority for some reason or other keeps the matter pending for a period of three years and thereafter he dismisses the revision on the ground that the period of three years has expired. The revisional authority can thus easily defeat the assessee's remedy by way of revision by delaying the matter till the three-year period expires. Here, for reasons beyond the control of the assessee, the remedy by way of revision is lost to him by the revisional process getting delayed or prolonged. Perh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the Income-tax Act which provides for a different scheme of revision. Further, the word "revise" in section 34(2) is a comprehensive expression and it does not merely denote the passing of the order in revision. The word "revise" cannot be understood to mean "pass an order in revision". Revision is a legal process and does not denote the final act of passing an order terminating the legal process. The legal process consists of various steps such as calling for the records of the proceedings, making an enquiry by the revisional authority or causing an enquiry to be made thereon, and passing final orders thereon as the revisional authority thinks fit. Therefore, the entire process commencing from the calling of the records and ending with the passing of the final order has been termed as revision in the said section. Each one of the steps in the process is a revisional process. Therefore, if any one of the steps in the process has been initiated within the period of limitation, there is no further limitation on the exercise of the power. Therefore, if the assessee has invoked the revisional power within the period of three years as provided for in section 34(1)(c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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