Revision u/s 264 Passed Without Waiver of Appeal Rights - Whether Appeal Before CIT(A) Still Maintainable

[Fahiyaz Ahmmed]

Dear Experts,

An assessee filed revision u/s 264 during the period available for filing appeal before CIT(A) and without waiving the statutory right of appeal. By oversight, the Commissioner entertained and allowed the revision petition.

Whether such revision order becomes defective or without jurisdiction in view of section 264(4)? Further, can the assessee still maintain appeal before CIT(A) after such mistaken revision order?

[YAGAY andSUN]

Section 264(4) of the Income-tax Act, 1961 places an express statutory bar on exercise of revisional jurisdiction by the Commissioner in cases where the order is appealable before the CIT(A) and either:
(i) the time for filing such appeal has not expired, or
(ii) the assessee has not waived the right of appeal.

Therefore, where the assessee files a revision petition during the subsistence of the appeal period and without expressly waiving the statutory appellate remedy, the Commissioner lacks jurisdiction to entertain the revision petition. Any order passed in contravention of Section 264(4) is vulnerable to challenge as being without jurisdiction and legally unsustainable.

The defect is not merely procedural but goes to the root of the Commissioner's authority to assume revisional jurisdiction. The embargo under Section 264(4) is mandatory in nature. Consequently, an order passed ignoring such statutory prohibition may be regarded as nullity or voidable in law, depending upon facts and judicial interpretation applicable in the jurisdiction.

As regards maintainability of appeal before CIT(A), the mere filing or even erroneous allowance of revision petition does not automatically extinguish the statutory appellate remedy where there was no conscious and express waiver of appeal rights by the assessee. Since the revision itself was incompetent ab initio due to the statutory bar, the assessee may contend that the appellate remedy survives.

However, practical difficulty may arise because two parallel remedies against the same order are ordinarily impermissible. The assessee may therefore have to disclose the complete facts before the CIT(A) and contend that the revisional order was passed without jurisdiction under Section 264(4), and hence cannot operate as a bar against appeal.

The issue would ultimately depend upon:
(i) whether any express or implied waiver of appellate remedy can be inferred from conduct of the assessee,
(ii) whether the revision order has attained finality, and
(iii) the judicial view regarding effect of an order passed contrary to Section 264(4).

In principle, however, where statutory conditions precedent for invoking Section 264 were absent, the revisional order itself suffers from jurisdictional infirmity, and the assessee can legitimately argue that the appeal before CIT(A) remains maintainable.

AI Summary

Revision under section 264 and appellate rights before CIT(A) raise questions on maintainability, jurisdiction, and waiver requirements. A question concerns whether a revision petition filed under section 264 during the appeal period, without waiver of the appellate remedy, can validly be entertained and allowed by the Commissioner. The related point is whether such a revision order becomes defective or without jurisdiction under section 264(4), and whether an appeal before the CIT(A) remains maintainable despite the mistaken revision order.