9 Section 264(4) of I. T. Act, 1961 – Revision – Scope of power of Commissioner – Waiver of right to appeal by assessee – Appeals filed on similar issue for other assessment years – Not ground for rejection of application for revision – Revision petition maintainable

1.      
(2018) 400 ITR 497 (Del)

Paradigm
Geophysical Ltd. vs. CIT

A.Y.:
2012-13,  Date of Order: 13^th Nov.,
2017

The
assessee was a non-resident company and a tax resident of Australia. It
provided and developed software enabled solutions and annual maintenance
services to the solutions supplied by it. For the A. Y. 2012-13, the assessee,
inter alia applied the provisions of section 44BB of the Income-tax Act, 1961
and filed its return. Pursuant to the scrutiny assessment, the Assessing
Officer issued a draft assessment order treating the receipts as royalty or fee
from technical services. No objections were filed u/s. 144C(2) of the Act, by
the assessee and therefore, no directions were issued by the DRP. Consequently,
the Assessing Officer passed a final order dated 11.05.2015, u/s. 144C(3)(b)
r.w.s. 143(3) of the Act confirming the adjustments made in the draft
assessment order. He applied the provisions of section 44DA and computed the
total income of the assessee. The assessee did not file any appeal against the
order of the Assessing Officer.

On
01.02.2016, the assessee filed a revision petition u/s. 264 of the Act, before
the Commissioner on the ground that the Assessing Officer had wrongly not
applied section 44BB and had incorrectly invoked and applied section 44DA. The
assessee submitted that for the A. Y. 2012-13, it had not availed of the remedy
of appeal and had invoked the alternative remedy under section 264. The
Commissioner declined to interfere with the order primarily on the ground that
on similar issue which arose in the A. Ys. 2011-12 and 2013-14, the assessee
had filed appeals before the appellate authority, and therefore, the revision
petition u/s. 264 for A. Y. 2012-13 was not maintainable. 

The
assessee filed writ petition and challenged the order of the Commissioner. The
Delhi High Court allowed the writ petition and held as under:

“i)   The Commissioner could not refuse to
entertain a revision petition filed by the assessee u/s. 264, if it was
maintainable, on the ground that a similar issue arose for consideration in
another year and was pending adjudication in appeal before another forum.

ii)    The time for filing appeal had expired. The
assessee had waived its right to file appeal and had not filed any appeal
against the order in question before the Commissioner (Appeals) or Tribunal.
Therefore, the negative stipulations in clause (a), (b) and (c) of section
264(4) were not attracted.

iii)   When a statutory right was conferred on an
assessee, it imposes an obligation on the authority. New and extraneous
conditions, not mandated and stipulated, expressly or by implication, could not
be imposed to deny recourse to a remedy and right of the assessee to have his
claim examined on merits. The Commissioner could not refuse to exercise the
statutorily conferred revisional power because the Assessing Officer was his
subordinate and under his administrative control.

iv)   The Commissioner while exercising power under
section 264 exercised quasi-judicial powers and he must pass a speaking and a
reasoned order. The reasoning could not be sustained for it was contrary to the
Legislative mandate of section 264.

v)   The matter is remanded to the
Commissioner to decide the revision petition afresh and in accordance with
law.”