JAYARAM C C Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The prayer in this Original Petition is to quash Exts.P1 and P4 orders passed by the respondents and for the issuance of a writ of mandamus or any other appropriate writ, order or direction compelling the respondents not to make the additions of Rs.90,000/.- Rs.15,972/- and Rs.21,706/- as they are unjustified and against the provisions of law and for other incidental reliefs.

(2.) The facts of the case may be briefly stated as follows: For the assessment year 1979-80 the petitioner filed a return declaring a total income of Rs.6,92,290/-. The second respondent Income Tax Officer determined the income at Rs.9,77,860/- and in arriving at the total income the Income tax Officer made an addition of a sum of Rs.1,27,678/- as per Ext. P1 assessment order being income from undisclosed sources. Aggrieved by Ext. P1 order the petitioner filed an appeal before the Commissioner of Income Tax (Appeals) who refused to entertain the same and dismissed the appeal in limine for non payment of admitted tax without any good or sufficient reason, as per Ext. P2 order. The petitioner took up the matter under second appeal before the Appellate Tribunal and the Tribunal also without going into the merits of the case, dismissed the appeal in limine as per Ext. P3 order affirming the findings of the Commissioner of Income Tax (Appeals) that the petitioner had failed to pay the admitted tax without any good or sufficient reason. Thereafter, the petitioner filed a revision petition before the first respondent against Ext. P1 order. The said revision petition was dismissed by the first respondent as per Ext. P4 order on the ground inter alia that the petitioner's case is covered by S.264(4)(a) of the Income Tax Act, 1961 and not by S.264(4)(c) as contended by the petitioner. The challenge in the instant Original Petition is against Ext. P4 order of the first respondent.

(3.) The question for consideration is whether the revision petition filed by the petitioner before the first respondent is maintainable under S.264 of the Income Tax Act. The petitioner would contend that where an appeal is dismissed in limine instead of on merits, a revision under S.264 is maintainable and it is not hit by any of the fetters created against the revision in the said section. The petitioner would further submit that the fetter created by S.264(4)(c) of the Income Tax Act to the effect that the Commissioner shall not revise any order under S.264 of the Act where 'the order has been made the subject of an appeal'. Commissioner (Appeals) or to the Appellate Tribunal applies only where the appeals has been effectively and finally disposed of on merits and not in a case where the appeal has been disposed of in limine without going into the merits as in the instant case. The petitioner has a further case based on the circular No.367 dated 26th July, 1983 issued by the Board according to which the Board are of the view that an order cannot be said to have been made 'subject of an appeal' if the appeal has been disposed of by the Commissioner (Appeals) or the Appellate Tribunal without passing an order under S.251(1) or 254(1) on merits.