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Gujarat High Court
Judgename :G.T.Nanavati, B.C.Patel
DIGVIJAY CEMENT CORPORATION LIMITED - Appellant
Versus
C.B.Rathi, The CIT, Rajkot - Respondent
S.C.A. 3470 of 1979
Decided On : 09/14/1993
The order of ITO which remains in tact meaning thereby that it was not a subject matter of appeal, could never have been made subject of an appeal to the tribunal because such appeal would not be maintainable. Therefore, in court opinion, what sub-clause (c) contemplates is that, that order or that part of the order which was made subject of an appeal to the tribunal and that would obviously mean an order that could have been made subject of an appeal and certainly not that part of the order against which no appeal could have been filed. In this case, it is an admitted fact that the assessee had not made any claim before the ITO in respect of the claim which was made before the Commissioner for the first time. Thus, there was no decision of the ITO on that point and such a claim was not at all considered by the AAC while hearing the appeal against the order passed by the ITO. Thus, there was no decision of the AAC also on this point. Neither the assesee nor the Revenue could have, therefore, filed any appeal before the Tribunal in that behalf. Court is therefore, of the opinion that the revision application was not barred because of provisions of section 264 (4) (c).
[Para 9]
Income Tax Act, 1961 — Sec. 264 — Revisional Jurisdiction — Scope of — Power of revision could not be restricted to such erroneous orders which have become erroneous as a result of some error committed by I.T.O. — Independently of any decision or absence of any decision on part of I.T.O order of assessment can be challenged as erroneous.
What in fact the assessee did by filing the revision application before the Commissioner was to challenge the order of assessment on the ground that it was erroneous. It may be that the error was committed not by the ITO but by the assessee and that error was detected by the assessee later on. But that certainly cannot preclude the assessee from challenging the order of assessment on the ground that the order was erroneous inasmuch as under the law, deduction under section 36B ought to have been granted to the assessee. The power of revision under section 264 cannot be restricted to such erroneous orders which have become erroneous as a result of some error committed by the ITO while passing the orders. Independently of any decisions or absence of any decision on the part of the ITO, order of assessment can be challenged as erroneous if, for example some provision was overlooked not only by the assessee but also by the ITO. Even in such a case, order of assessment can be challenged by filing a revision application before the Commissioner. Therefore, even this contention raised on behalf of the Revenue deserves to be rejected.
[Para 10]
( 1 ) THE petitioner is a public limited company engaged in the business of manufacturing cement and asbestos products. The relevant assessment year is assessment years 1973-74. In the accounting year which ended on 31. 12. 1972, it exported cement and asbestos products to foreign countries. In its return of income, the petitioner declared the total income at Rs. 45,21,260/ -. The petitioner had claimed weighted deduction under section 35b of the Income-tax Act for export market development on expenses of Rs. 57,988/ -. The ITO allowed the claim of the petitioner. As the ITO had made additions in the total income of the assessee and had disallowed certain claims made by the assessee, the assessee had preferred an appeal to the Appellate Assistant commissioner. That appeal was partly allowed. Against that order passed by the AAC, the petitioner-assessee preferred further appeal to the tribunal. The ITO also aggrieved by that order had preferred an appeal to the tribunal. The appeal filed by the ITO was dismissed and that of the petitioner was partly allowed on 15. 11. 1978. Ultimately the petitioner on coming to know of the correct position of law in view of various decisions of different benches of the tribunal that assessee cannot be denied the benefit of section 35b merely because the expenditure may be incurred in India, made a revision application on 18. 3. 1977 under section 264 to the Commissioner of Income tax claiming weighted deduction under section 35b on expenses of Rs 41,46,009/ -. The expenses which the assessee claimed were in addition to the expenses which the assessee had earlier claimed during the assessment proceedings. The Commissioner by his order dated 13. 2. 1979 dismissed that application on the ground that the assessment order for the assessment year 1973-74 was made subject of an appeal to the AAC and then to the tribunal and, therefore, in view of the bar contained in section 264 (4), the revision application was not competent. This order passed by the Commissioner is challenged in this petition.
( 2 ) WHAT is contended by the learned counsel for the petitioner is that the commissioner has dismissed the revision application filed by the petitioner on an erroneous view of section 264 (4) of the Act. He submitted that the claim which the petitioner had made in the revision application was not the subject matter of assessment either by the ITO or by the ACC. Therefore, it could not have been and in fact it was not the subject matter of an appeal to the tribunal. He submitted that for that reason, the revision application filed by the petitioner was not hit by the provisions of Clause (c) of sub-section (4) section 264 of the Act. In order to appreciate the contentions raised on behalf of the petitioner, it is necessary to refer to section 264 as it stood then and for ready reference, we think it proper to setout the said section. It was as under:"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 any application by the assessee for revision, call for the record of the 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 think fit; (2) The Commissioner shall not of his own motion revise any order under this section if the order had 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 one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier: provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the a
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