Paradigm Geophysical Pty Ltd vs. DCIT (Delhi High Court)

(i) There are restrictions and constraints on exercise of power under Section 264 vide sub-Section 4. In terms of Sub-section 4 to Section 264, jurisdiction to revise an order cannot be exercised under clauses (b) and (c) when the order is pending in an appeal before the Deputy Commissioner (Appeals), or when the order has been made the subject of an appeal to the Commissioner (Appeals) or to the Tribunal. Revision is also not maintainable under clause (a) to sub-section 4, when an appeal against the order lies to the Deputy Commissioner (Appeals) or Commissioner (Appeals) or to the Income Tax Appellate Tribunal (“Tribunal”) but such appeal has not been filed and the time within which such appeal may be filed has also not expired. Further, for clause (a) the assessee should not have waived his right to appeal. Three conditions; non-filing of appeal, time to file appeal had not expired and non waiver of right to appeal are cumulative.

(ii) Thus, a Revision Petition u/s 264 of the Act can be filed against any order (including an assessment order) passed by a subordinate officer, which is otherwise appealable before Commissioner (Appeals) under section 246A of the Act or under section 253 of the Act before the Tribunal, where such appeal has not been filed and limitation period for invoking remedy has expired and the assessee has waived his right to appeal. The statutory bar is that Revision Petition cannot be entertained when an appeal has been filed before Commissioner (Appeals) or before the Tribunal in respect of such order or if no such appeal has been filed, the time limit for filing such appeal has not expired. Right to file an appeal should be waived for a revision petition to be maintainable. The objective and purpose is to ensure that the Assessee does not assail the same order before two forums and that it can elect between either filing an appeal or a revision. The Assessee cannot avail of both remedies against the same order for the same Assessment Year. If the time period for filing the appeal has not expired, the revision cannot be entertained – only to ensure that after filing of Revision, the assessee does not thereafter file an appeal. Even thereafter, the requirement is that the assessee should have waived his right to appeal.

(iii) It is not the case of the respondents or the reason given by the Commissioner that time for preferring appeal had not expired. It is the admitted case that time for filing appeal against the assessment order for AY 2012-13 had expired. The assessee had waived his right to file appeal. Clause (a) is therefore not attracted. Clause (b) to Section 264(4) of the Act is also not attracted in the present case and it is not the case of the Revenue that the petitioner has filed an appeal for 2012-13 before Dy. Commissioner (Appeals). The petitioner has also not filed any appeal against the said order before the Commissioner (Appeals) or the Tribunal to attract the negative stipulation in clause (c) to Section 264 (4) of the Act. The present case therefore, does not fall under clauses (a) to (c) of Section 264 (4) of the Act.

(iv) Under the Act, i.e., Income Tax Act, each Assessment Year is separate and the assessee files the return for each year and assessment order is passed. Strict principles of res judicata do not apply, though principle of consistency is applied. Commissioner cannot refuse to entertain a revision petition filed by the assessee under Section 264 of the Act if it is maintainable on the ground that a similar issue has arisen for consideration in another year and is pending adjudication in appeal or another forum. Negative stipulations are clearly not attracted. When a statutory right is conferred on an assessee, the same imposes an obligation on the authority. New and extraneous conditions, not mandated and stipulated, expressly or by implication, cannot be imposed to deny recourse to a remedy and right of the assessee to have his claim examined on merits.

(v) The Jurisdictional Commissioner no doubt is an administrative authority to the subordinate officers including assessing officer, nevertheless the Act has conferred revisionary power on the said Commissioner. He cannot refuse to exercise the said power because the assessing officer was his subordinate and under his administrative control. The Commissioner while exercising power under Section 264 of the Act exercises quasi judicial powers and he must pass a speaking and a reasoned order. He cannot abdicate his authority on the ground that a similar issue has arisen and is subject matter of appellate proceedings in other years. This would be clearly contrary to the provisions of Section 264 of the Act.

(vi) The impugned order no doubt reflects and states that the contention of the petitioner was incorrect and merits rejection but it does not assign and give any reason for the said conclusion. The impugned order cannot be sustained as it does not examine the contention on merits while recording the decision. The Commissioner must give and assign reasons for taking a particular view, even if he accepts the findings and reasons recorded by the assessing officer and does not agree with the contention raised by the assessee. This court is, therefore, deprived and is unable to fathom the reasons and ground which were in the mind of the Commissioner. The order of the Commissioner should have contained reasons for the conclusions arrived at and ought to have dealt with the issue on merits as required under Section 264 of the Act.

(vii) Learned counsel for the petitioner has submitted that the petitioner had filed an appeal for AY 2011-12 on this issue and vide order dated 28th April, 2017, the Tribunal has ruled in favour of the Assessee. In the succeeding AY 2013-14, Commissioner (Appeals) has ruled in its favour.

(viii) In view of the above, the writ petition is allowed and the impugned order dated 6th March, 2017 is set aside and quashed. The matter is remanded to the Commissioner to decide the Revision Petition afresh and in accordance with law.