Revision application under Income-tax Act not maintainable after appeal dismissal for non-compliance with legal provisions

Manmala Exhibitors Versus Joshi (MC.), Commissioner of Income-tax And Others.

Manmala Exhibitors Versus Joshi (MC.), Commissioner of Income-tax And Others. - [2002] 257 ITR 563, 178 CTR 442, 124 TAXMANN 762 Issues:
1. Maintainability of the revision petition under section 264 of the Income-tax Act.
2. Whether the assessee is entitled to file a revision petition under section 264 after the appeal was dismissed for non-compliance with section 249(4)(a) of the Income-tax Act.

Issue 1: Maintainability of the revision petition under section 264 of the Income-tax Act:
The petitioner challenged the order of the Commissioner of Income-tax under section 264 of the Income-tax Act, which dismissed the revision application on the grounds of maintainability and merits. The petitioner sought substitution of the book value by the indexed cost of acquisition of the asset. The Commissioner of Income-tax (Appeals) dismissed the appeal for non-compliance with section 249(4)(a) of the Income-tax Act, leading to the revision petition. The core issue was whether the assessee could file a revision petition under section 264 after the appeal was dismissed for non-compliance with section 249(4)(a). The petitioner argued that since the appeal was dismissed before admission, the revision was competent, citing various case laws. However, the Revenue contended that once the remedy of appeal was chosen, the revision was barred under section 264(4)(c) of the Act.

Issue 2: Filing a revision petition after dismissal of the appeal:
The court analyzed the legal provisions under sections 246, 246A, and 264 of the Income-tax Act. It was noted that the assessee had the choice of seeking remedy under section 246 (appeal) or under section 264 (revision). The Commissioner of Income-tax had no power to revise any order under section 264 if it was made the subject of an appeal, even if the relief claimed in the revision differed from the appeal. The court referred to the decision in Hindustan Aeronautics Ltd. v. CIT [2000] 243 ITR 808, emphasizing that once the appeal was chosen, the remedy of revision was barred. The court distinguished the Kerala High Court's decision and held that the appeal being the subject-matter of an appeal before the Commissioner of Income-tax (Appeals), the revision petition under section 264 was clearly barred.

Conclusion:
The court held that the revision application filed by the assessee under section 264 of the Income-tax Act was not maintainable due to the appeal being dismissed for non-compliance with section 249(4)(a). The court emphasized that if the petitioner chose to pursue the remedy of appeal before the Income-tax Appellate Tribunal, the findings given by the Commissioner of Income-tax in the order under section 264 on the merits would not affect the petitioner. The petition was dismissed with no order as to costs.