Revisional jurisdiction under the Income-tax Act extends to orders under statutory rules, and refusal to hear revision is a jurisdictional error.

Section 264 revisional jurisdiction extends to an order passed under rule 40 of the Income-tax Rules, because the Rules framed under the Act have statutory force and the statute does not expressly exclude such revision. A Commissioner cannot decline to entertain a revision merely on the mistaken view that an order under the Rules is outside section 264. The refusal to consider the revision was therefore a jurisdictional error, the impugned order was quashed, and the matter was remanded for decision on merits in accordance with law.

---

---

Issues: Whether a revision under section 264 of the Income-tax Act, 1961 was maintainable against an order passed under rule 40 of the Income-tax Rules, 1962, and whether the Commissioner could decline to entertain it on the ground that orders under the Rules were not revisable.

Analysis: Section 264 confers revisional jurisdiction and does not exclude revision merely because the impugned order arises under the Rules. The Income-tax Rules framed under the Act have statutory force, and an order refusing waiver of interest under rule 40 is an order passed under the Act for this purpose. A revisional authority must exercise the jurisdiction vested in it and cannot refuse consideration solely on an erroneous view that such an order is outside section 264.

Conclusion: The revision was maintainable, and the Commissioner's refusal to entertain it was unsustainable.

Final Conclusion: The impugned order was quashed and the matter was remanded for decision of the revision application in accordance with law.

Ratio Decidendi: An order made under statutory rules framed under the Income-tax Act is amenable to revision under section 264 where the statute does not expressly exclude such revision, and a refusal to exercise that revisional jurisdiction on a mistaken view of non-maintainability is a jurisdictional error.

---