Kanodia Cold Storage vs Commissioner of Income Tax

B.M. Lal and M.C. Agarwal, JJ.—The short point that emerges for consideration in this petition is:

Whether the Commissioner, Income Tax was competent to exercise his jurisdiction u/s 264 of the Income Tax Act (for short the Act) by entertaining revision application arising out of an order passed under Rule 40 of the Income Tax Rules, 1962 and decide the same on merits?

The facts, in brief, leading to this petition are as Under:

Petitioner-firm Canadian Cold Storage, 50A Tara Katie Road. Allahabad, at the relevant period was carrying on cold storage business.

For the assessment year 1977-78, besides tax, interest amounting to Rs. 2,790 was also charged u/s 215 of the Article

Against this, the Petitioner - firm moved an application Under Rule 40 of the Income Tax Rules, 1962 for waiver. However, his submission for waiver was turned down.

Being aggrieved against the said order, the Petitioner-firm preferred a revision application invoking the provisions of Section 264 of the Act, but by the impugned order dated 3.3.1981 contained in Annexure 5, the Commissioner, Income Tax, declined to entertain the revision and dismissed it, inter alia, on the ground that any order passed under the Income Tax Rules is not revisable.

Proposition of law in this respect is well-settled that where no appeal lies and provision for revision is there, indeed revision can certainly be maintainable provided the order under revision is without jurisdiction inasmuch as the authority acted in the exercise of the jurisdiction illegally or with material irregularity, or exercised the jurisdiction not vested in it by law, or where the authority failed to exercise the Jurisdiction so vested in it.

In the instant case, the Commissioner has failed to exercise the jurisdiction so vested in him u/s 264 of the Act. On the other hand, the revision application is rejected only on the ground that revision is not maintainable against an order passed under the Income Tax Rules.

Bare reading of Section 264 of the Act does not exclude revision application against an order passed Under the Rules.

The Income Tax Rules framed Under the Act have statutory force of law, therefore, it cannot be said that the order passed refusing to waive the interest is not an order passed under the Act.

Thus, in our considered opinion, the Commissioner, Income Tax, failed to exercise his Jurisdiction in entertaining the revision application filed by the Petitioner, and therefore the order impugned cannot be sustained in the eyes of law.

From the discussion aforesaid, the order impugned dated 3.3.1981 contained in Annexure 5, to tills petition is quashed and the case is remanded to the Commissioner, Income Tax-Respondent No. 1 to decide the Petitioner''s revision application in accordance with law.

With the above direction, this petition is finally disposed of.