Appeal to Commissioner (Appeals) – Revision – Power of Commissioner(Appeals) – Application for revision and withdrawal of appeal to Commissioner(Appeals) – Order passed in revision granting relief – Commissioner(Appeals) has no power to decide appeal

41.  Assessing
Officer vs. Dharmendra Vishnubhai Patel; 409 ITR 276 (Guj) Date of order: 5^th February, 2018 Sections 246A and 264 of ITA 1961

Appeal to Commissioner (Appeals) – Revision – Power of
Commissioner(Appeals) – Application for revision and withdrawal of appeal to
Commissioner(Appeals) – Order passed in revision granting relief –
Commissioner(Appeals) has no power to decide appeal

In this case assessment was made and penalty was levied on the assesse.
On 24/09/2016, the assesse filed an appeal against the order of penalty before
the Commissioner(Appeals). On 16/02/2017, the assessee filed a revision
petition u/s. 264 of the Income-tax Act, 1961 (hereinafter
for the sake of brevity referred to as the “Act”)  against the
order of penalty before the Commissioner. On the same day he also made a
communication to the Commissioner (Appeals) before whom his appeal was pending,
in which, he conveyed his intention to withdraw the appeal. In exercise of his
revisional powers u/s. 264, the Commissioner set aside the order of penalty.
Despite this the Commissioner (Appeals) proceeded to decide the appeal on the
merits and by an order dated 25/09/2017 dismissed the appeal. The assesse filed
writ petition and challenged the validity of the order of the Commissioner
(Appeals).

The Gujarat High Court allowed the writ petition and held as under:

“i)   In terms of clause (a) of
sub-section (4) of section 264, revisional powers would not be exercised, inter
alia, in a case where the period of limitation for filing appeals has not
expired and the assesse has not waived the right of appeal. This is essentially
to ensure that in the case of the same assesse a single issue does not receive
consideration at the hands of the two separate and independent authorities, one
exercising appellate jurisdiction and the other revisional jurisdiction.

ii)   The assessee had clearly made
a choice to persuade the Commissioner to exercise his revisional powers u/s.
264 and not pursue his appeal before the Appellate Commissioner. The revisional
authority therefore correctly proceeded to decide the revision petition of the
assesse and on the facts correctly allowed it. It was thereafter not open for
the Commissioner (Appeals) to still examine the merits of such an order.”