Super Spinning Mills LimitedElgi Towers737-D Green Fields, P.B.No.7113, Coimbatore v. Commissioner of Income Tax – I 63, Race Course Road, Coimbatore – 641 018

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 20.08.2010CORAMTHE HONOURABLE MR.JUSTICE D.HARIPARANTHAMANW.P.NO.6591 OF 2009Super Spinning Mills LimitedElgi Towers737-D Green Fields, P.B.No.7113, Coimbatore.Represented by its Managing DirectorSumanth Ramamurthi... PetitionerVersus1.Commissioner of Income Tax – I 63, Race Course Road, Coimbatore – 641 018.2.Assistant Commissioner of Income Tax Company Circle – I (2) Coimbatore. ... RespondentsPRAYER: Writ Petition filed under Article 226 of the Constitution ofIndia for a Writ of Certiorarified Mandamus, calling for the recordsrelating to order passed by the 1st respondent herein dated02.03.2009 and quash the same and direct the 1st respondent toconsider the matter afresh as per law. For Petitioner : Mr.K.RaviFor Respondents : Mr.J.Naresh Kumar O R D E RThe petitioner is a private limited company carrying onbusiness of manufacturing of textile cotton yarn. The secondrespondent passed the assessment order on 29.03.2000 for theassessment year 1997-1998 under Section 143(3) of the Income-taxAct, 1961 (in short "the Act"). The second respondent determined theincome at Rs.7,53,85,400/- and demanded tax of Rs.2,90,08,129/-. https://hcservices.ecourts.gov.in/hcservices/

2.Aggrieved by the assessment order of the secondrespondent, the petitioner preferred an appeal before theCommissioner of Income Tax (Appeals) on 24.04.2000. The AppellateAuthority passed an order on 24.11.2000, by partly allowing theappeal and issued certain directions to the second respondent.However, the petitioner also preferred a further appeal to theIncome Tax Appellate Tribunal. 3.The second respondent passed the revised order dated16.02.2001 by giving effect to the order of the Commissioner ofIncome Tax (Appeals) dated 24.11.2000 referred to above. 4.The second respondent also passed the rectificationorder dated 11.02.2003 under Section 154 of the Act. The secondrespondent passed another rectification order dated 20.01.2005 underSection 154 of the Act. 5.While so, the Income Tax Appellate Tribunal allowed theappeal on 26.07.2005. Based on the order of the Income TaxAppellate Tribunal, the second respondent passed the revisedassessment order dated 27.02.2006 by determining total income atRs.2,00,69,480/-, including long term capital gain ofRs.1,75,97,700/-. 6.Thereafter, the petitioner filed a petition on14.08.2006 to the second respondent under Section 154 of the Act torectify the mistake in the revised assessment order dated27.02.2006, for which the second respondent passed an order on07.11.2006 rectifying some mistakes. 7.The petitioner also preferred an appeal before theCommissioner of Income Tax (Appeals) against the said order dated07.11.2006. The appeal was dismissed by an order dated 31.10.2007.Thereafter, the petitioner filed a revision petition under Section264 of the Act on 05.12.2007 before the Revisional Authority, theCommissioner of Income Tax – I, Coimbatore. 8.The first respondent passed an order dated 02.03.2009under Section 264 of the Act rejecting the application of thepetitioner seeking to revise the order dated 07.11.2006 on theground that the revision petition is barred by limitation and thatthe order sought to be revised is not within the revisional power asper Section 264(4) of the Act.9.The writ petition is filed against the aforesaid orderdated 02.03.2009 of the first respondent, passed under Section 264of the Act rejecting the petitioner's plea to revise the order dated07.11.2006 of the second respondent passed under Section 154 of theAct. https://hcservices.ecourts.gov.in/hcservices/

10.Notice of motion was ordered on 16.04.2009. Therespondents have filed counter affidavit. 11.Heard Mr.K.Ravi, learned counsel for the petitioner andMr.J.Naresh Kumar, learned counsel for the respondents. 12.Two reasons are given for rejecting the applicationseeking to revise the order passed under Section 154 of the Act.Those reasons are:-(a) the application seeking to revise the order is barredby limitation, as the same was made beyond one year. (b) the order sought to be revised was already made thesubject of an appeal and that therefore, the application is notmaintainable in view of Section 264(4)(c) of the Act. 13.To decide this issue, it is relevant to extract Section264 of the Act. "264.(1) In the case of any order other thanan order to which Section 263 applies passed by anauthority subordinate to him, the Commissioner may,either of his own motion or on an application bythe assessee for revision, call for the record ofany proceeding under this Act in which any suchorder has been passed and may make such inquiry orcause such inquiry to be made and, subject to theprovisions of this Act, may pass such orderthereon, not being an order prejudicial to theassessee, as he thinks fit. (2) The Commissioner shall not of his ownmotion revise any order under this section if theorder has been made more than one year previously. (3) In the case of an application for revisionunder this section by the assessee, the applicationmust be made within one year from the date on whichthe order in question was communicated to him orthe date on which he otherwise came to know of it,whichever is earlier:Provided that the Commissioner may, if he issatisfied that the assessee was prevented bysufficient cause from making the application withinthat period, admit an application made after theexpiry of that period. https://hcservices.ecourts.gov.in/hcservices/ (4) The Commissioner shall not revise anyorder under this section in the following cases-(a) Where an appeal against the order lies tothe [Deputy Commissioner (Appeals)] [or to theCommissioner (Appeals)] or to the AppellateTribunal but has not been made and the time withinwhich such appeal may be made has not expired, or,in the case of an appeal [to the Commissioner(Appeals)] or to the Appellate Tribunal, theassessee has not waived his right of appeal; or (b) where the order is pending on an appealbefore the [Deputy Commissioner (Appeals)]; or (c) where the order has been made the subjectof an appeal [to the Commissioner (Appeals) or tothe Appellate Tribunal. (5) Every application by an assessee forrevision under this section shall be accompanied bya fee of [five hundred] rupees. (6) On every application by an assessee forrevision under this sub-section, made on or afterthe 1st day of October, 1998, an order shall bepassed within one year from the end of thefinancial year in which such application is made bythe assessee for revision. Explanation.- In computing the period oflimitation for the purposes of this sub-section,the time taken in giving an opportunity to theassessee to be re-heard under the proviso tosection 129 and any period during which anyproceeding under this section is stayed by an orderor injunction of any court shall be excluded. (7) Notwithstanding anything contained in sub-section (6), an order in revision under sub-section(6) may be passed at any time in consequence of orto give effect to any finding or directioncontained in an order of the Appellate Tribunal,(National Tax Tribunal), the High Court or theSupreme Court. Explanation 1.- An order by the Commissionerdeclining to interfere shall, for the purposes ofthis section, be deemed not to be an orderprejudicial to the assessee. https://hcservices.ecourts.gov.in/hcservices/ Explanation 2.- For the purposes of thissection, the [Deputy Commissioner (Appeals)] shallbe deemed to be an authority subordinate to theCommissioner."14.It is true that the person who seeks to revise theorder under Section 264 of the Act should make an application withinone year from the date of receipt of the order that is sought to berevised. In this case, the order sought to be revised is the orderdated 07.11.2006 of the second respondent passed under Section 154of the Act. The same was communicated to the petitioner on10.01.2007 and it is not disputed. The application seeking to revisethe order was made on 05.12.2007. Hence, it is made within one year.But the first respondent wrongly proceeds as if the petitioner seeksrevision of the order dated 27.02.2006. The order dated 27.02.2006was passed under Section 243(3) of the Act. The petitioner does notseek revision of the said order. Had the first respondent takeninto account that the order sought to be revised is the order dated07.11.2006, this error could not have occurred. The relevant passagefrom the impugned order in this regard is extracted hereunder:"The company application seeks for a revisionof the order dated 27.2.2006. Whereas section 264(2) of the Income-tax Act limits the powers of theCommissioner of Income-tax as follows: TheCommissioner of Income-tax shall not on his ownmotion revise any order under this section if theorder has been made more than one year previously. As the order sought to be revised has beenpassed on 27.2.2006 the time limit of the saidorder expired on 27.2.2007. Hence, the petition isbarred by limitation." 15.The judgment of a Division Bench of this Court in KADRIMILLS (COIMBATORE) LTD., VS. COMMISSIONER OF INCOME-TAX reported in2000 (243) ITR 861 (MAD) relied on by the learned counsel for therespondents also squarely applies to the facts of this case. 16.Hence, the first reason assigned in the impugned orderdated 02.03.2009 relating to limitation is erroneous. However, inmy view, the first respondent is correct in holding that theapplication seeking revision of order is hit by Section 264(4)(c) ofthe Act. In this matter, the petitioner filed the appeal against theorder dated 07.11.2006 before the Commissioner of Income Tax(Appeals) and the appeal was dismissed by the Commissioner of IncomeTax (Appeals) in I.T.A.No.453/06-07 on 31.10.2007. Having taken thematter before the appellate authority, the petitioner is notentitled to seek revision of the order. When his appeal wasdismissed, he could have sought remedy against the order dismissing https://hcservices.ecourts.gov.in/hcservices/ his appeal as provided under the Act. On the other hand, he soughtto revise the order that was appealed against. This is impermissibleas per Section 264(4)(c) of the Act. But, the first respondent hasstated the earlier round of the appeals before the Commissioner ofIncome Tax (Appeals) and Income Tax Appellate Tribunal, as a barunder Section 264(4) of the Act. This is not correct. But thiscould not help the petitioner, as he chose to file appeal againstthe order dated 07.11.2006 before the Commissioner of Income Tax(Appeals) and Commissioner of Income Tax (Appeals) rejected theappeal. Therefore, he cannot seek to revise the order that wasappealed against. 17.In fine, the writ petition fails and the same isdismissed. No costs. RNS/TKSd/-Asst. Registrar//True Copy//Sub Asst. RegistrarTo1.The Commissioner of Income Tax – I 63, Race Course Road, Coimbatore – 641 018.2.The Assistant Commissioner of Income Tax Company Circle – I (2) Coimbatore. + 1 cc to Mr. K. Ravi, Advocate SR No.61925GR(CO)SR/26.8.2010 ORDER MADE INW.P.NO.6591 OF 2009