TMI Blog2023 (9) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... etition, reserving the right of the petitioner to challenge the order, if so advised, proposed to be passed by Assessing Officer pursuant to Ext P5 order, in accordance with law, notwithstanding the challenge against Ext P1 order. - HONOURABLE MR. JUSTICE C.S. DIAS For the Petitioner: By Advs. Anil D. Nair, Telma Raju, Biju. P.K, Edathara Vineeta Krishnan For the Respondent: By Adv Christopher Abraham, Income Tax Department JUDGMENT The writ petition is filed to quash Ext P5 order passed by the Principal Commissioner of Income Tax - the first respondent. 2. The brief relevant facts for the determination of the writ petition are: (i) The petitioner is a partnership firm doing business in PVC pipes. It is an assessee under the Income Tax Act, 1961 (for brevity, Act ). (ii) The petitioner had filed its return of income for the assessment year 2017-2018 declaring a total income of Rs. 65,12,480/-. (iii) The return was taken up for scrutiny and the assessment was completed on 16.12.2019, by Ext P1 order, under Sec. 143(3) of the Act. (iv) Aggrieved by Ext P1 Assessment Order (A.O), the petitioner has preferred a statutory appeal befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udice before the First Appellate Authority and the second one deals with when the matter has been decided in the appeal. Hence, in those matters decided in the appeal, the doctrine of merger applies. The subject matter in dispute in the appeal and the revision is one and the same, and is hence statutorily barred. In the instant case, the assessing authority, after conducting a detailed inquiry, has held that the income is from other sources. It is this turnover which is made the subject-matter of revision, on the premise that it is to be assessed at higher rate of tax under Section 115 BBE as unexplained credit. Therefore, the revisional authority ought not to have exercised its jurisdiction under Sec. 263 of the Act. Hence, the writ petition may be allowed. 5. Heard; Sri. Anil D. Nair, the learned Counsel appearing for the petitioner and Sri. Christopher Abraham, the learned Standing Counsel appearing for the respondents. 6. Sri. Anil D. Nair reiterated the contentions in the writ petition and in the reply affidavit. He argued that the action of the first respondent in initiating a suo-motu revision and passing Ext P5 order, during the pendency of the appeal, is illegal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply to Ext P3 show cause notice, the first respondent, by the impugned Ext P5 order, set aside Ext P1 A.O and directed the Assessing Officer to pass a speaking order in accordance with law, after affording the petitioner an opportunity of being heard. 12. It is this action of the first respondent that is assailed in the writ petition. 13. Sec. 263 of the Income Tax Act reads thus: 263 (1) .The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he, may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation I - For the removal of doubts, it is hereby declared that, for the purposes of this sub- section,- (a) an order passed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal (National Tax Tribunal), the High Court or the Supreme Court. Explanation .- In computing the period of limitation for the purposes of subsection (2), the time taken in giving an opportunity to the assessee to be reheard 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. 14. Interpreting Sec. 263 of the Act, in Kelpunj Enterprises vs. Commissioner of Income Tax (supra), this Court has held thus: It is significant that there is no such restriction in the exercise of power conferred by section 263 on the Commissioner to revise an order of the Income-tax Officer. The vital departure in the language employed in the two sections has to be given its due weight. The restriction in the powers of the Commissioner in terms provided by sub-section (4) of section 264 contrasts with the wider and apparently unlimited power given by section 263. We have, therefore, to respect the intent to the legislature which appears to us to be obvious that the power under section 263 is not inhibited by the pendency of any appeal before the Appellate Assistant Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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