ORDER :

1. In this writ petition, the petitioner assails the correctness of the proceeding, dated 30.09.2004, passed by the 1st respondent, under Section 264(6) of the Income-Tax Act, 1961 (for short ‘the Act’) for the Assessment Year 1997-98.

2. Heard Sri. A.V. Siva Karthikeya, learned Counsel for the petitioner and Sri. J.V. Prasad, learned Senior Standing Counsel, appearing on behalf of the respondents.

3. The petitioner contends that the 3rd respondent passed an Order of Assessment dated 31.03.2003, for the Assessment Year 1997-98 under Section 144 read with Section 147 of the Act, on the father of the petitioner, represented by the petitioner as the son and legal heir; that aggrieved by the said Assessment Order, the petitioner had filed an appeal before the 2nd respondent, as provided under the Act; the said appeal filed by the petitioner was dismissed by the 2nd respondent, by order dated 09.07.2003, holding that the appeal filed was void ab initio and cannot be admitted, since the appellant had failed to pay the admitted tax due, as per the return of income filed voluntarily on 31.03.2003 and the 2nd respondent, thus, held that no adjudication on merits of the appeal, is warranted, having regard to the express provisions of Section 249(4)(a) of the Act.

4. Petitioner further contends that, upon the rejection of the appeal by the 2nd respondent (as cannot be admitted), the petitioner invoked the power of Revision conferred on the 1st respondent under Section 264 of the Act, and filed an application on 29.03.2004, seeking Revision of the assessment order dated 31.03.2003 made by the 3rd respondent. In the said Revision preferred, the petitioner sought for reconsideration of the issue relating to proceeds from sale of agricultural land by the petitioner’s father being subjected to Long Term Capital Gains, applying the provisions of Section 54-F of the Act.

5. The 1st respondent by order dated 30.09.2004, rejected the said Revision application filed by the petitioner. In the order, the 1st respondent stated the reason for such rejection as, since, the petitioner/assessee filed an appeal against the Assessment Order of the 3rd respondent, dated 31.03.2003 before the 2nd respondent under Section 246 of the Act, and the 2nd respondent having dismissed the same by order dated 09.07.2003, the provisions of Section 264(4) of the Act would stand attracted. According to the 1st respondent, as per the mandate of provisions of Section 264(4) of the Act, the 1st respondent shall not exercise the power of revision in respect of an order that has been made “subject of an appeal” to the Commissioner of Appeals or the Appellate Tribunal. Thus, the 1st respondent rejected the Revision petition without admitting the same.

6. The petitioner contends that the rejection of the Revision petition by the 1st respondent, is without proper appreciation and understanding of the scope and application of provisions of Section 264(4) of the Act; that since the appeal filed by the petitioner to the 2nd respondent having not been adjudicated, on merits and having been rejected as void ab initio due to non-payment of admitted tax due, the same cannot be considered as an “appeal adjudicated” under Section 251 of the Act and also that the rejection of the revision petition by the 1st respondent is also contrary to Circular No. 367, dated 26.05.1983, issued by the Central Board of Direct Taxes, wherein it has been clarified that “where the appeal was dismissed on the ground that the appeal was incompetent” the same cannot be said to have made “subject of an appeal” under Section 251(1) or Section 254(1) of the Act, thereby, attracting provisions of Section 264(4)(c) of the Act preventing/precluding the exercise of powers by the 1st respondent under Section 264 of the Act.

7. On the other hand, learned Senior Standing Counsel placing reliance on the counter-affidavit supports the impugned order passed by the 1st respondent under Section 264(6) of the Act and seeks