COMMISSIONER OF INCOME TAX Vs. HINDUSTAN AERONAUTICS LIMITED

JUDGEMENT

(1.) THIS appeal raises a short but interesting question as to the scope of the revisional jurisdiction of the Commissioner of Income-tax to entertain a Revision Petition under Section 264 of the Income-tax Act, 1961 at the instance of the assessee against that part of the appellate order of the Appellate Assistant Commissioner against which he is aggrieved in a case where the Revenue itself has preferred a second appeal to the Income-Tax Appellate Tribunal from another part of the same first-appellate order in respect of which the revenue is dissatisfied.

(2.) THE question arises this way : THE assessee is Hindustan Aeronautics Limited, Respondent in this appeal. THE assessment year is 1970-71. Against the order of the Income Tax Officer the assessee preferred an appeal before the Appellate Assistant Commissioner on several grounds. THE appeal was partly allowed and against that part of the appellate order which went against the assessee, the latter, first, preferred an appeal to the Tribunal; but later withdrew the appeal and invoked the revisional jurisdiction of the Commissioner under Section 264. In the meanwhile, the department preferred an appeal to the Tribunal against that part of the Appellate Assistant Commissioner's order by which some relief was given to the Assessee. THE assessee, inter-alia, relied upon a Circular of the Central Board of Direct Taxes issued under Section 119 of the Act, which according to him, enabled such a revision against the appellate order even where another part of the same order was subject to an appeal before the Tribunal at the instance of the Department. THE Commissioner did not accept this view and held that, in the circumstances, he had no jurisdiction. In the Writ Petition of the assesses, the Learned Single Judge has held that the Commissioner had jurisdiction and has directed him to dispose of the Revision Petition on merits and in accordance with law. THE revenue has now come-up in appeal.

(3.) THE assessee filed Writ Petition No. 4803 of 1979 under Article 226 of the Constitution for quashing the order of the Commissioner and for a direction to dispose of the Revision Petition on merits. THE Learned Single Judge allowed the Writ Petition relying upon the said Circular of the Board. He held that the Board and the Law Ministry have understood the scope of Section 264 of the Act in a manner different from the view taken by some of the High Courts. THE Learned Judge observed :