The Kerala High Court upheld the revision proceedings to correct wrong rate of tax applied to benefit assessee in assessment order.
The issue that arose before the Single Judge was whether during the pendency of an appeal before the First Appellate Authority under the Income Tax Act, the Commissioner of Income Tax (CIT) could exercise its power of revision under Section 263 of the Income Tax Act on an issue that had been decided to its prejudice in the assessment order, which was the subject matter of appeal before the Appellate Authority.
Although it was the contention of the writ petitioner before the Single Judge that, since it had preferred an appeal against the assessment order and the appeal was pending before the First Appellate Authority, the Revisional Authority under the Income Tax Act could not exercise its power of revision in relation to the same issue, the Single Judge found, based on the submissions of the Standing Counsel for the Income Tax Department, that the issue that was the subject matter of the revision proceedings was not the same as the one that was decided against the assessee in the assessment order which was the subject matter of the appeal.
The Single Judge therefore, found that the Revenue was justified in initiating proceedings under Section 263 of the Income Tax Act to correct the wrong rate of tax that had been applied and which worked to the benefit of the assessee in the assessment order that was the subject matter of the appeal.
A Division Bench comprising Justice Dr AK Jayasankaran Nambiar and Justice Kauser Edappagath observed that “We see no reason to doubt the correctness of the findings of the Single Judge, who has relied on various decisions of the Supreme Court to come to his conclusion. We also find that, at any rate, the right of the appellant to challenge the order proposed to be passed by the Assessing Officer pursuant to the revision order passed in accordance with Section 263 of the Income Tax Act has been reserved to the appellant. The appellant therefore cannot be seen as prejudiced in any manner.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
