The mandatory nature of the language of s. 119 of the Act and the failure of the respondent to exercise jurisdiction vested in him led to the decision to set aside the impugned order.

CHANDRAKANTARAJ URS, J.

( 1 ) PETITIONER Hindustan Aeronautics Limited is an assessee under the IT Act, 1961, (hereinafter referred to as the Act.)

( 2 ) FOR the asst. yr. 1970-71 relating to the financial year ending 31-3-1969, the petitioner filed an appeal before the AAC of It against the assessment order of the ITO. The appeal was on several grounds relating to several aspects of the assessment order with which the assessee was aggrieved. The appeal came to be partly allowed and partly disallowed by the AAC by his order dt. 27-10-1976. Petitioner assessee filed an appeal against the order of the AAC, to the extent the appeal was disallowed, before the Tribunal at Bangalore. The appeal before the Tribunal came to be withdrawn with the permission of the Tribunal on 9-5-1977 and on 17-5-1977 a revision application came to the filed u/s 264 of the Act before the CIT, Karnataka, Bangalore the respondent herein - against the order of the AAC to the extent the assessee petitioner was dissatisfied with that order. In the meanwhile the Department had filed an appeal before the tribunal against the order of the AAC in so far as related to some aspects of the success of the assessee. That appeal of the Department came to be dismissed by the Tribunal on 28-3-1978. The respondent - Commr. by his order dt. 22-12-1978, having regard the Ruling of Kerala High court in the case of Mohammed Haneef v. ITO, Quilion and others (1973) Tax 645 (Ker) dismissed the revision petition of the assessee-petitioner as not competent and maintainable. Having no other alternative remedy, the petitioner has approached this Court u/art. 226 of the constitution for redress.

( 3 ) IT is petitioner's contention that sub-s. 4 (c) of s. 264 of the Act is no bar for the assessee to maintain a revision petition against the order of the AAC in so far as it affects the assessee even though the Department may subject that order in so far as it favours the assessee to an appeal before the Tribunal notwitstanding the decision of the Kerala High Court in Mohammed haneef's case which has not laid down the correct law in regard to scope and ambit of revisional power of the Commr. u/s 264 of the Act.

( 4 ) IT is also petitioner's contention, it was denied an opportunity hearing on 20-11-1978 and had it been given then it would have brought to the notice of the respondent - Commr. the circular instructions of the CBDT hearing F. No. 6/52/68-ITJ dt. 30-7-1970 which clearly explained that a Departmental appeal to the Tribunal against an assessment order would not deprive the assessee of his right to move the Commr. u/s 264 of the Act and the said instruction being binding in nature on the Commr. he had wrongfully declined to exercise his jurisdiction.

( 5 ) IN so far as the first of the contention is concerned, Shri G. Sarangan ld. Counsel for the petitioner has analysed the language of the provisions of s. 264 of the Act and submitted that the words, 'assessment order' occurring in sub-s. 4 (c) of s. 264 of the Act should be read down or read restrictedly to mean and include that part of an assessment order which is made the subject of appeal before the Commr. (Appeals) or the Tribunal. He has emphasised the scheme of appeals and revision in the Act and has advanced forceful arguments to demonstrate that the decision of the Kerala High Court in Mohammed Haneef's case has not correctly laid down the law. But the Kerala High Court explained the scope of sub-s. 4 (c) of s. 264 of the Act following a Division Bench Ruling of the Madras High Court in the case of C. Gnanasundara Nayagar v. CIT, Madras (1961) 41 ITR 375 (Mad ). In the said case the ld. Judges were construing s. 33a (2) of the IT Act, 1923 corresponding to s. 264 of the Act.

( 6 ) NEARLY the same arguments as advanced by Sri G. Sarangan before me were advanced by the counsel for the assessee there. The ld. Judges, however, rejected the arguments and refused to construe the words 'assessment order' restrictedly.

Click Here to Read the rest of this document