TMI Blog2005 (4) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... , whereby and whereunder the Commissioner has declined to entertain the application for revision made under section 264 of the Income-tax Act, 1961 (hereinafter referred to as "the said Act"). Of course, he has recorded reasons for not entertaining the revision application. He has said in his cryptic order that from the perusal of the assessment records and the report of the Assessing Officer it appears that despite opportunity being given the assessee failed to produce evidence regarding investment made by the petitioner. The assessee-petitioner was also asked to produce personal drawings but no particulars were produced. Therefore, the Commissioner felt that discretion should not be exercised in entertaining the application for revision for making an enquiry. Mr. Khaitan, learned counsel appearing for the petitioner, while assailing the impugned order contends that the impugned order is bad patently as the Commissioner has failed to consider the scope and purview of section 264 of the said Act, which fortunately is much wider than the power vested under section 263. Power of section 263 is exercised in a case where the impugned order sought to be revised is erroneous and prejud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclining to interfere shall, for the purposes of the section, be deemed not to be an order prejudicial to the interests of the assessee. The Commissioner in lawful exercise of jurisdiction has found that the petitioner was always a defaulter and in spite of opportunity being given, the documents of investment and particulars thereof were not shown. As such the Commissioner will not give a premium to the lapses or laches of the assessee-petitioner. His further contention is that the petitioner-assessee is not affected in any manner by the order of the Assessing Officer, which was sought to be impugned before the Commissioner. Under those circumstances, he contends that this court in exercise of its extraordinary power should not interfere with the impugned order passed upon discretion. His next contention is that the question of principles of natural justice in this case does not arise. Moreover, he has reminded me of the applicability of the principles of natural justice. He further contends that each and every order is not necessarily required to be passed upon compliance with natural justice. One has to establish affectation of lawful right and that such right is sought to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his own motion or on an application by the assessee. In this case the assessee made the application. It is the duty coupled with the power of the Commissioner to make an enquiry or call for records for enquiry. He is competent to pass such order as he may think fit but the same shall not be prejudicial to the interests of the assessee. Section 264 of the said Act for better understanding is quoted hereunder: "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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision can be invoked on the application of the assessee for his or its benefit or for prejudice. Upon enquiry if it is found that the assessee has been prejudiced by any order of the Assessing Officer, the Commissioner with this power can undo such wrong by adopting appropriate, just and lawful measure. The Division Bench of the Kerala High Court had the occasion to examine the scope of the provision of section 264 of the said Act while deciding the case of Parekh Brothers v. CIT [1984] 150 ITR 105, 117 as cited by Mr. Khaitan. The above Division Bench discussed and considered the other decisions of the various High Courts and found that all the High Courts took the consistent view that the revisional power conferred on the Commissioner under section 264 is very wide. He has the discretion to grant or refuse relief and the power to pass such order in revision as he may think fit. The discretion, which the Commissioner has to exercise, is undoubtedly to be exercised judicially, not arbitrarily according to his fancy. Therefore, subject to the limitations prescribed in section 264 of the said Act the Commissioner in exercise of his revisional power under the said section may pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the Commissioner exercises his jurisdiction lawfully meaning thereby considering all records produced before him; he must apply his mind first; while doing so, if he declines then the explanation may be applicable. I think the aforesaid explanation is inappropriate on the facts and circumstances of this case. It is not the grievance of Mr. Khaitan's client that they are prejudiced by the order of declining but the Commissioner's failure to make enquiry into this matter, take note of the documents produced before him. According to me the Commissioner in this case on receipt of the application instead of relying solely on the reports or the records of the case, should have made enquiry considering the documents placed before him by the petitioner. At least this should have been reflected in the impugned order that he had taken note on the date of making application of the revision, of the tax exempting investment. There might be varieties of reasons for not producing evidence at the time of the assessment; this does not mean that the assessee is precluded from producing evidence of contemporaneous nature at a later stage by filing an application for revision. The power under se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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