M/S RATAN INDUSTRIES LIMITED vs. PRINCIPAL COMMISSIONER AND ANOTHER

Neutral Citation No. - 2023:AHC:102141 Court No. - 7 Case :- WRIT TAX No. - 700 of 2022 Petitioner :- M/S Ratan Industries Limited Respondent :- Principal Commissioner And Another Counsel for Petitioner :- Rahul Agarwal Counsel for Respondent :- Gaurav Mahajan,Ashish Agrawal Hon'ble Rohit Ranjan Agarwal,J. 1. Heard Sri Rahul Agarwal, learned counsel for the petitioner and Sri Ashish Agarwal, learned counsel for the respondents. 2. This writ petition has been filed assailing the order dated 30.03.2022 passed by the respondent no. 1 under Section 264 of the Income Tax Act, 1961 [hereinafter referred as the 'Act of 1961'] for the assessment year 2012-13. 3. Learned counsel for the petitioner submitted that the assessment proceedings had been completed against which petitioner had filed a revision under Section 264 of the Act of 1961. The Principal Commissioner of Income Tax vide order dated 30.03.2022 rejected the revision on the ground that as the writ petition, filed by the assessee against the order passed initiating reassessment proceedings under Section 143 (3)/147 of the Act of 1961 on 30.03.2019, is pending consideration, in view of the provisions of Section 264 (4) (a) of the Act of 1961, no order can be passed under Section 264 of the Act of 1961. 4. Sri Rahul Agarwal, learned counsel for the petitioner, contends that in the writ petition filed by the assessee no interim order was granted and the writ petition has become infructuous by efflux of time as reassessment proceedings had already been concluded and

assessment order has been passed. He further contends that the writ petition filed by the assessee would not amount to appeal as envisaged under Section 264 (4) (a) of the Act of 1961. 5. Per contra, Sri Ashish Agarwal, learned counsel appearing for the department, has submitted that as Section 264 (4) (a) of the Act of 1961 is attracted and writ petition is pending before this Court, the Principal Commissioner had rightly proceeded to pass the order and application filed under Section Section 264 of the Act of 1961 cannot be decided. 6. I have heard respective counsel for the parties and perused the material on record. 7. Before adverting to decide the issue in hand a cursory glance of Section 264 of the Act of 1961 is necessary for better appreciation of the case, which reads as follows; "Section 264 of the Income Tax Act: Revision of other orders; (1) In the case of any order other than an order to which section 263 applies passed by an authority subordinate to him, the Principal Commissioner or Commissioner may, either of his own motion or on an application by the assessee for revision, call for the record of 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 thinks fit. (2) The Principal Commissioner or Commissioner shall not of his own motion revise any order under this section if the order has 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 Principal Commissioner or Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period.

(4) The Principal Commissioner or Commissioner shall not revise any order under this section in the following cases— (a) where an appeal against the order lies to the Deputy Commissioner (Appeals) or to the Commissioner (Appeals) or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired, or, in the case of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal; or (b) where the order is pending on an appeal before the Deputy Commissioner (Appeals); or (c) where the order has been made the subject of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal. (5) Every application by an assessee for revision under this section shall be accompanied by a fee of five hundred rupees. (6) On every application by an assessee for revision under this sub-section, made on or after the 1st day of October, 1998, an order shall be passed within one year from the end of the financial year in which such application is made by the assessee for revision. Explanation.—In computing the period of limitation for the purposes of this sub-section, the time taken in giving an opportunity to the assessee to be re- heard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. (7) Notwithstanding anything contained in sub-section (6), an order in revision under sub-section (6) may be passed at any time in consequence of or to give effect to any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation 1.—An order by the Principal Commissioner or Commissioner declining to interfere shall, for the purposes of this section, be deemed not to be an order prejudicial to the assessee. Explanation 2.—For the purposes of this section, the Deputy Commissioner (Appeals) shall be deemed to be an authority subordinate to the Principal Commissioner or Commissioner." 8. From perusal of Sub-section (4) (a) of the Act of 1961 it is clear that Principal Commissioner or Commissioner shall not revise any order which is under challenge in case where an appeal against the order lies to the Deputy Commissioner (Appeals) or to the Commissioner (Appeals) or to the Appellate Tribunal but has not been made and the time within which such appeal may be made

has not expired, or, in the case of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal. 9. This Court finds that the order passed by the Assessing Officer/Income Tax Authorities on 30.03.2019 initiating the reassessment proceedings against assessee was subject to challenge before this Court in which the writ Court on 17.12.2019 had categorically held that the pendency of the writ petition will not cause any embargo or fetter on the part of the concerned authority to proceed in accordance with law. 10. Once the writ Court had made this observation and had permitted the concerned authority to proceed in the matter, pursuant to which the reassessment proceedings for the assessment year 2012-13 was completed on 31.12.2019 by the Deputy Commissioner of Income Tax, Circle 2 (1)(1) Agra. 11. The finding recorded by the respondent no. 1 as to the extent that in view of the provisions of Section 264 (4) (a) of the Act of 1961, if any appeal is pending no order under Section 264 can be passed is a fallacy. The pendency of writ petition before this Court would not amount to pendency of any appeal before any authority. In fact, the writ Court had made it clear that there is no embargo upon the competent authority to proceed in the matter. 12. Once the proceedings were initiated for reassessment by the respondent and the competent authority proceeded to complete the same on 31.12.2019, no occasion arise as to any matter being pending before this Court as the only challenge before the writ Court was for initiation of proceedings under Section 143 (3) read with Section 147 of the Act of 1961. Once the reassessment was

made and the proceedings were completed, the writ petition has practically become infructuous. The ground taken by the Principal Commissioner of Income Tax does not hold any ground as the writ petition is not an appeal according to Section 264 (4) (a) of the Act of 1961. 13. In view of the above discussions, I find that the order dated 30.03.2022 passed by the Principal Commissioner of Income Tax- I, Agra is unsustainable in the eyes of law and, as such, same is hereby quashed and set-aside. 14. Writ petition stands allowed. 15. Respondent no. 1 is hereby directed to continue with the revisional proceedings initiated by the assessee/petitioner under Section 264 of the Act of 1961 and shall decide the same expeditiously, in accordance with law. Order Date :- 11.5.2023 Shekhar Digitally signed by :- SHASHI SHEKHAR PANDEY High Court of Judicature at Allahabad