Finality of an unchallenged penalty reduction barred rehearing of the Revenue's appeal in revisional jurisdiction.

The High Court noted that the assessee's revision had reduced the penalty and that order had attained finality because the Revenue did not challenge it. On that basis, a rehearing of the Revenue's appeal on merits would not enable any effective enhancement of penalty and could create conflicting decisions. The Court distinguished cases requiring simultaneous hearing of connected appeals to avoid prejudice, but held that the facts did not justify such a direction in revisional jurisdiction. The request to direct rehearing of the Revenue's appeal was therefore declined.

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Issues: Whether the Revenue's appeal should be reheard on merits and whether the Tribunal ought to be directed to decide it notwithstanding the finality of the assessee's revision reducing the penalty.

Analysis: The revision concerned only the quantum of penalty. The order passed in the assessee's revision reducing the penalty had not been challenged by the Revenue and had therefore attained finality. In these circumstances, a fresh decision on the Revenue's appeal could not lead to any effective enhancement of penalty and would risk conflicting decisions. The Court distinguished the situation from one in which both connected appeals must be heard together to avoid prejudice, holding that the facts did not justify such a direction in revisional jurisdiction.

Conclusion: The request to direct rehearing of the Revenue's appeal on merits was declined, and the revision was decided against the Revenue.

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