Facts of the Case

  • The case pertains to Assessment Year 2010–11.
  • An assessment order dated 29.09.2021 was passed under Sections 143(3)/254/144B.
  • The said order followed an earlier Tribunal decision dated 11.12.2019, which had set aside the CIT(A)’s order dated 20.01.2015.
  • Initially, the Assessing Officer had made a disallowance under Section 36(1)(iii) amounting to ₹4,28,65,241/- via order dated 20.03.2013.
  • The assessee filed a revision petition under Section 264 on 19.10.2021.
  • The revision petition was dismissed by the PCIT on 31.03.2023 on the ground that the appeal period had not expired.

Issues Involved

  1. Whether a revision petition under Section 264 can be rejected solely on the ground that the limitation period for filing an appeal has not expired.
  2. Whether the absence of an actual appeal filed by the assessee invalidates the rejection of the revision petition.

 Petitioner’s Arguments

  • The petitioner contended that the rejection of the revision petition came as a surprise.
  • It was specifically asserted that no appeal had been filed against the assessment order dated 29.09.2021.
  • Therefore, dismissal of the revision petition on the assumption of availability of appellate remedy was unjustified.

 Respondent’s Arguments

  • Initially, the revenue sought time to obtain instructions regarding whether an appeal had been filed.
  • Upon instructions, the respondent confirmed that no appeal had been filed against the assessment order.

Court’s Findings / Order

  • The Delhi High Court held that since no appeal had been filed, the rejection of the revision petition was unsustainable.
  • The impugned order dated 31.03.2023 was set aside.
  • The Court directed that:
    • The revision petition under Section 264 be decided on merits.
    • The petitioner be granted an opportunity of hearing.
    • The proceedings be concluded within 12 weeks.

Important Clarification

  • Mere availability of an appellate remedy (i.e., appeal period not expired) cannot be a ground to reject a revision petition under Section 264, especially when no appeal has actually been filed.
  • The authority must verify factual existence of an appeal before rejecting revision jurisdiction.

 Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60815052023CW55242023_150153.pdf

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