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Judgment
D. Hariparanthaman, J.—The petitioner is a private limited company carrying on business of manufacturing of textile cotton yarn. The
second respondent passed the assessment order on 29.03.2000 for the assessment year 1997-1998 u/s 143(3) of the Income Tax Act, 1961 (in
short ""the Act""). The second respondent determined the income at Rs. 7,53,85,400/- and demanded tax of Rs. 2,90,08,129/-.
Aggrieved by the assessment order of the second respondent, the petitioner preferred an appeal before the Commissioner of Income Tax
(Appeals) on 24.04.2000. The Appellate Authority passed an order on 24.11.2000, by partly allowing the appeal and issued certain directions to
the second respondent. However, the petitioner also preferred a further appeal to the Income Tax Appellate Tribunal.
The second respondent passed the revised order dated 16.02.2001 by giving effect to the order of the Commissioner of Income Tax (Appeals)
dated 24.11.2000 referred to above.
The second respondent also passed the rectification order dated 11.02.2003 u/s 154 of the Act. The second respondent passed another
rectification order dated 20.01.2005 u/s 154 of the Act.
While so, the Income Tax Appellate Tribunal allowed the appeal on 26.07.2005. Based on the order of the Income Tax Appellate Tribunal, the
second respondent passed the revised assessment order dated 27.02.2006 by determining total income at Rs. 2,00,69,480/-, including long term
capital gain of Rs. 1,75,97,700/-.
Thereafter, the petitioner filed a petition on 14.08.2006 to the second respondent u/s 154 of the Act to rectify the mistake in the revised
assessment order dated 27.02.2006, for which the second respondent passed an order on 07.11.2006 rectifying some mistakes.
The petitioner also preferred an appeal before the Commissioner of Income Tax (Appeals) against the said order dated 07.11.2006. The
appeal was dismissed by an order dated 31.10.2007. Thereafter, the petitioner filed a revision petition u/s 264 of the Act on 05.12.2007 before
the Revisional Authority, the Commissioner of Income Tax-I, Coimbatore.
The first respondent passed an order dated 02.03.2009 u/s 264 of the Act rejecting the application of the petitioner seeking to revise the order
dated 07.11.2006 on the ground that the revision petition is barred by limitation and that the order sought to be revised is not within the revisional
power as per Section 264(4) of the Act.
The writ petition is filed against the aforesaid order dated 02.03.2009 of the first respondent, passed u/s 264 of the Act rejecting the petitioner''s
plea to revise the order dated 07.11.2006 of the second respondent passed u/s 154 of the Act.
Notice of motion was ordered on 16.04.2009. The respondents have filed counter affidavit.
Heard Mr. K. Ravi, learned Counsel for the petitioner and Mr. J. Naresh Kumar, learned Counsel for the respondents.
Two reasons are given for rejecting the application seeking to revise the order passed u/s 154 of the Act. Those reasons are:
(a) the application seeking to revise the order is barred by limitation, as the same was made beyond one year.
(b) the order sought to be revised was already made the subject of an appeal and that therefore, the application is not maintainable in view of
Section 264(4)(c) of the Act.
To decide this issue, it is relevant to extract Section 264 of the Act.
264.(1) In the case of any order other than an order to which Section 263 applies passed by an authority subordinate to him, the Commissioner
may, either of his own motion or on an application by the assessee for revision, call for the record of any proceeding under this Act in which any
such order has been passed and may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass such
order thereon, not being an order prejudicial to the assessee, as he thinks fit.
(2) The Commissioner shall not of his own motion revise any order under this section if the order has been made more than one year previously.
(3) In the case of an application for revision under this section by the assessee, the application must be made within one year from the date on
which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier:
Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that
period, admit an application made after the expiry of that period.
(4) The Commissioner shall not revise any order under this section in the following cases:
(a) 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; or
(b) where the order is pending on an appeal before the [Deputy Commissioner (Appeals)]; or
(c) where the order has been made the subject of an appeal [to the Commissioner (Appeals) or to the Appellate Tribunal.
(5) Every application by an assessee for revision under this section shall be accompanied by a fee of [five hundred] rupees.
(6) On every application by an assessee for revision under this sub-section, made on or after the 1st day of October, 1998, an order shall be
passed within one year from the end of the financial year in which such application is made by the assessee for revision.
Explanation.- In computing the period of limitation for the purposes of this sub-section, the time taken in giving an opportunity to the assessee to be
re-heard under the proviso to Section 129 and any period during which any proceeding under this section is stayed by an order or injunction of
any court shall be excluded.
(7) Notwithstanding anything contained in Sub-section (6), an order in revision under Sub-section (6) may be passed at any time in consequence
of or to give effect to any finding or direction contained in an order of the Appellate Tribunal, (National Tax Tribunal), the High Court or the
Supreme Court.
Explanation 1.- An order by the Commissioner declining to interfere shall, for the purposes of this section, be deemed not to be an order
prejudicial to the assessee.
Explanation 2.- For the purposes of this section, the [Deputy Commissioner (Appeals)] shall be deemed to be an authority subordinate to the
Commissioner.
It is true that the person who seeks to revise the order u/s 264 of the Act should make an application within one year from the date of receipt
of the order that is sought to be revised. In this case, the order sought to be revised is the order dated 07.11.2006 of the second respondent
passed u/s 154 of the Act. The same was communicated to the petitioner on 10.01.2007 and it is not disputed. The application seeking to revise
the order was made on 05.12.2007. Hence, it is made within one year. But the first respondent wrongly proceeds as if the petitioner seeks revision
of the order dated 27.02.2006. The order dated 27.02.2006 was passed u/s 243(3) of the Act. The petitioner does not seek revision of the said
order. Had the first respondent taken into account that the order sought to be revised is the order dated 07.11.2006, this error could not have
occurred. The relevant passage from the impugned order in this regard is extracted hereunder:
The company application seeks for a revision of the order dated 27.2.2006. Whereas section 264(2) of the Income Tax Act limits the powers of
the Commissioner of Income Tax as follows: The Commissioner of Income Tax shall not on his own motion revise any order under this section if
the order has been made more than one year previously.
As the order sought to be revised has been passed on 27.2.2006 the time limit of the said order expired on 27.2.2007. Hence, the petition is
barred by limitation.
The judgment of a Division Bench of this Court in Kadri Mills (Coimbatore) Ltd. Vs. Commissioner of Income Tax, relied on by the learned
Counsel for the respondents also squarely applies to the facts of this case.
Hence, the first reason assigned in the impugned order dated 02.03.2009 relating to limitation is erroneous. However, in my view, the first
respondent is correct in holding that the application seeking revision of order is hit by Section 264(4)(c) of the Act. In this matter, the petitioner
filed the appeal against the order dated 07.11.2006 before the Commissioner of Income Tax (Appeals) and the appeal was dismissed by the
Commissioner of Income Tax (Appeals) in I.T.A. No. 453/06-07 on 31.10.2007. Having taken the matter before the appellate authority, the
petitioner is not entitled to seek revision of the order. When his appeal was dismissed, he could have sought remedy against the order dismissing
his appeal as provided under the Act. On the other hand, he sought to revise the order that was appealed against. This is impermissible as per
Section 264(4)(c) of the Act. But, the first respondent has stated the earlier round of the appeals before the Commissioner of Income Tax
(Appeals) and Income Tax Appellate Tribunal, as a bar u/s 264(4) of the Act. This is not correct. But this could not help the petitioner, as he
chose to file appeal against the order dated 07.11.2006 before the Commissioner of Income Tax (Appeals) and Commissioner of Income Tax
(Appeals) rejected the appeal. Therefore, he cannot seek to revise the order that was appealed against.
In fine, the writ petition fails and the same is dismissed. No costs.