Commissioner cannot revise order under Section 264 of Income Tax Act during pending appeal. Withdrawal of appeal doesn't grant right to seek revision.

The Court held that the Commissioner cannot revise an order under Section 264 of the Income Tax Act when an appeal is pending, dismissing the petitioner's revision request. Although withdrawal of the appeal was allowed, it did not grant the right to seek revision. The Appellate Authority was directed to promptly dispose of the appeal on its merits. The Court clarified that withdrawal of the appeal does not entitle the petitioner to seek revision under Section 264. The writ petition was closed without costs, and any pending miscellaneous petitions were ordered to be closed as well.

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Issues:
1. Jurisdiction of the Commissioner to consider revision under Section 264 of the Income Tax Act when an appeal is pending.
2. Validity of rejecting the revision application under Section 264 of the Income Tax Act.
3. Consideration of withdrawal of appeal and expeditious disposal by the Appellate Authority.

Analysis:

1. The petitioner, a Society under Registration Act, filed income tax returns claiming exemption under Section 11 of the Income Tax Act for the assessment year 2017-18. The assessment was completed under Section 143(3) of the I.T. Act, making an addition of a significant amount diverted by the petitioner to another institution. An appeal was filed against this order, which was pending before the National Faceless Appeal Centre [NFAC].

2. The petitioner applied for revision under Section 264 of the IT Act and simultaneously sought withdrawal of the appeal. The Commissioner rejected the revision application citing the pending appeal as a reason. The respondents argued that the remedy under Section 264 is alternative and cannot be availed when an appeal is pending. The Commissioner passed the rejection order within the stipulated time frame, which the respondents contended did not warrant interference.

3. The Court examined Section 264(4) of the I.T. Act, which prohibits revision when an appeal lies to the Deputy Commissioner (Appeals) or the Appellate Tribunal, or when the order is pending on appeal. Considering this provision, the Court concluded that the Commissioner cannot revise the order when an appeal is pending, thus dismissing the petitioner's request for revision.

4. The Court acknowledged the petitioner's request for withdrawal of the appeal and expeditious disposal by the Appellate Authority. While the withdrawal could not lead to a revision under Section 264, the Court directed the Appellate Authority to dispose of the appeal promptly. The Court emphasized that withdrawal of the appeal does not automatically grant the right to seek revision under Section 264.

5. In the final disposition, the Court directed the Appellate Authority to adjudicate the appeal on its merits and closed the writ petition without any costs. The judgment clarified that the withdrawal of the appeal does not entitle the petitioner to seek revision under Section 264 of the I.T. Act. Any pending miscellaneous petitions were also ordered to be closed.

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