TMI Blog2001 (12) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... as delivered by J.P. DEVADHAR J.-By this petition, the petitioner challenges the order of the Commissioner of Income-tax, passed under section 264 of the Income-tax Act, 1961 (for short "the I.T. Act"). By the said order, the Commissioner of Income-tax has dismissed the revision application filed by the assessee both on the ground of maintainability as well as on the merits. We propose to take up the issue of maintainability of the revision petition first. For the assessment year 1996-97, the return of income was filed on October 30, 1996, disclosing capital gains at Rs.4,78,19,737 by taking the book value as the cost of acquisition of the asset at Rs.31,50,000. A revised computation of income was filed and on January 12, 1999, assessment order was passed accepting the revised computation of income. Being aggrieved by the aforesaid order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals), inter alia, raising a plea that the assessee is entitled to substitute the book value of asset by the indexed value of the asset as per section 48 of the Income-tax Act and the Assessing Officer was wrong in rejecting the claim of the petitioner. In response to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) even before admission for non-compliance with section 249(4)(a) of the Income-tax Act? Mr. Pandit, learned counsel for the petitioner, contended that since the appeal has been dismissed even before it is admitted for non-compliance with section 249(4)(a), there was no effective appeal before the Commissioner of Income-tax (Appeals) and, hence, the revision petition under section 264 was competent. Mr. Pandit relied upon CIT v. Travancore Tea Estates Co. Ltd. [1988] 172 ITR 733 (Ker); Jagmohandas Gokaldas v. CWT [1963] 50 ITR 578 (Bom); [1965] 56 ITR 349 (SC) (sic); Warner Lambert Co. v. CIT [1994] 205 ITR 395 (Bom); Chiranjilal Daga v. CIT [1978] 113 ITR 363 (Mad); CIT v. Sakseria Cotton Mills Ltd. [1980] 124 ITR 570 (Bom) and CIT v. S. Ratnam Pillai [1991] 188 ITR 494 (Ker) and contended that where the appeal was withdrawn or was not maintainable or dismissed as time barred, there being no effective disposal of the appeal, the revision under section 264 of the Income-tax Act was maintainable. It was submitted that there was no adjudication of the issues before the Commissioner of Income-tax (Appeals) and if the revision is held not maintainable, then the petitioner will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to pay the admitted tax cannot render the order sought to be revised, covered under section 264(4)(c) of the Income-tax Act. In other words, it was submitted that an order can be said to be the "subject-matter of an appeal" within the meaning of section 264(4)(c) only if the appeal was considered and disposed of on the merits. Mr. Pandit brought to our notice that the decision of the Kerala High Court was, inter alia, based upon the decision of the apex court in the case of Board of Revenue v. Raj Brothers Agencies [1973] 31 STC 434, where the identical expression "the order made subject of an appeal" was construed by the apex court to mean "subject of an effective appeal". Mr. Pandit contended that in the instant case, since the appeal was dismissed even before it was admitted, in effect therewas no appeal at all and hence the revision under section 264 was maintainable. In our view, the decision of the Kerala High Court, with respect, does not lay down the correct interpretation of law. As held by the Madras High Court in the case of Kadri Mills (Coimbatore) Ltd. v. CIT [2000] 243 ITR 861, once the assessee has chosen the remedy of appeal, there is a bar under section 264( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective of the fact whether the appeal is by the assessee or by the Department. The Supreme Court clearly brought out the distinction between the revision powers of the Commissioner of Income-tax under sections 263 and 264 of the Income-tax Act. It was clearly held that under section 263, the Legislature intended that the scope of the revision should extend to a part of the order which had not been considered and decided in an appeal and accordingly made suitable amendment to Explanation (c) to section 263. It was held that when the Legislature does not make such distinction and provides that once the remedy of appeal is chosen, the remedy of revision is barred, it is not open to the asses see to seek recourse to the revision after the appeal is dismissed. In the light of the aforesaid decision of the Supreme Court, it is not necessary for us to deal with the various decisions cited on behalf of the assessee. Although the decision of the Supreme Court in the case of Board of Revenue v. Raj Brothers Agencies [1973] 31 STC 434, on an analogy supports the contention of the assessee, the same is distinguishable, firstly, on account of it being a matter pertaining to the Madras Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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