Income Tax Commissioner In Discretionary Power Of Revision Can't Act As Appellate Authority: Calcutta High Court
The Calcutta High Court has ruled that the power of an Appellate Authority is much wider than that of a Revisional Authority and the Commissioner, in the exercise of his discretionary power of revision under Section 264 of the Income Tax Act, cannot act as an Appellate Authority and go into the merits of the assessment by re-appreciating the facts and evidence. The single bench of...
The Calcutta High Court has ruled that the power of an Appellate Authority is much wider than that of a Revisional Authority and the Commissioner, in the exercise of his discretionary power of revision under Section 264 of the Income Tax Act, cannot act as an Appellate Authority and go into the merits of the assessment by re-appreciating the facts and evidence.
The single bench of Justice Md. Nizamuddin has observed that the petitioner/assessee has not filed any statutory appeal before the Commissioner of Income Tax (Appeals) with the sole intention of avoiding the payment of a huge amount of tax determined in the assessment order.
The petitioners have challenged the order of the Commissioner under its discretionary power under Section 264 of the Income Tax Act, 1961 and the subsequent order under Section 154 of the Income Tax Act arising out of the assessment order passed under Section 143 (3) of the Act relating to assessment year 2018-19. The taxable amount was determined and it was admitted that till date the petitioner has not paid a single penny in respect of the demand.
The petitioner initiated the second round of litigation before the Court. In the first round of litigation, the writ petition was dismissed by the court without going into the merits of the impugned assessment order.
The writ petition was dismissed without going into the merits of the assessment order, which was an appealable order before the Commissioner of Income Tax (Appeal), who has a very wide power to go into both facts and questions of law.
The court stated that the High Court, in the exercise of its jurisdiction under Article 226 of the Constitution of India, cannot act as an Appellate Authority over the assessment order on merits, facts, and evidence involved in an assessment proceeding.
In spite of the availability of a statutory Appellate Forum, petitioners have chosen to invoke Section 264 of the Income Tax Act for exercising the discretionary power of revision against the assessment order in question, which is not appealable though at the time of filing the revisional application, there was no bar of limitation to file the appeal.
The court noted that the petitioner has deliberately chosen the forum of revision under Section 264 of the Income Tax Act with a view to making out a case to come up before the Court again under Article 226 of the Constitution of India tactfully indirectly to get interference in the assessment order which the Commissioner in exercising the power under Section 264 of the Income Tax Act has refused.
The court dismissed the writ petition after considering the conduct of the petitioner.
Case Title: Unisource Hydro Carbon Services Private Limited Versus Union of India
Citation: 2022 LiveLaw (Cal) 72
Counsel For Appellant: Senior Advocate Abhrotosh Majumdar, and Advocate Himangshu Kumar Ray
Counsel For Respondent: Advocate S.N. Dutta