Declaration that a tax return is invalid under section 139(9) constitutes an order revisable under section 264; petition restored for fresh consideration.

A declaration that a taxpayer's return is invalid under the tax statute constitutes an "order" capable of revision; the respondent incorrectly treated the communication as nonorder despite dictionary meanings of mandate and authoritative direction, and prior authority accepted that such declarations are revisable. The impugned determination was quashed and set aside, and the revision petition was restored for de novo consideration by the original authority, thereby directing fresh adjudication on the merits of the return's validity.

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Issues: Whether a declaration under Section 139(9) of the Income-tax Act, 1961 that a return is invalid constitutes an "order" revisable under Section 264 of the Income-tax Act, 1961, and whether the revisional authority erred in holding that such a declaration is not an order and dismissing the revision application as not maintainable.

Analysis: The Court examined the character and legal effect of a communication under Section 139(9) declaring a return invalid and the scope of revisional power under Section 264. The Court held that a declaration under Section 139(9) is a mandate or authoritative direction affecting legal rights and obligations and therefore falls within the meaning of "order" for the purposes of Section 264. The Court noted precedent where similar communications were treated as revisable and emphasised that revisional jurisdiction is the appropriate forum to undertake detailed scrutiny of returns, accounts and related material. The Court found that the Revisional Authority misdirected itself by treating the CPC communication as non-reviewable and by dismissing the revision application as not maintainable without considering the substance. The Court also stressed requirements of natural justice, including providing an effective opportunity of hearing and passing a reasoned order on merits rather than merely remanding back to the CPC.

Conclusion: The declaration under Section 139(9) of the Income-tax Act, 1961 is an "order" within the meaning of Section 264 and is revisable under Section 264. The impugned order dismissing the revision application as not maintainable is quashed and set aside; the revision application is restored for de novo consideration and the Revisional Authority is directed to afford hearing and pass a reasoned order within the specified timeframe.

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