The Judgment of the Court was delivered by
R. Jayasimha Babu, J.:— The petitioner, who is the assessee, is aggrieved by the order of the Commissioner declining to exercise revisional jurisdiction under section 264 of the Income-Tax Act, 1961, in respect of the order of assessment made against the assessee for the assessment year 1991–92, and by the order of the Commissioner declining to condone the delay in filing the revision petition against the order of assessment made for the assessment year 1995-96.
2. So far as the assessment year 1991–92 is concerned, the order of the Commissioner is in accordance with the law declared by this court in the case of Reiter Machine Works Ltd. v. CIT, [1999] 240 ITR 531, wherein, it has been held that under section 264 of the Act, revisional jurisdiction cannot be exercised if an appeal had been preferred against the order sought to be revised.
3. It was so held having regard to the language of the section which places an embargo on the power of the Commissioner to revise an order “where the order has been made the subject of an appeal to the Commissioner of Income-Tax (Appeals) or to the Appellate Tribunal”. In this case, admittedly, the assessment order for the assessment year 1991–92 had been made the subject-matter of an appeal which had been preferred before the appellate authority. The Commissioner, therefore, has rightly declined to exercise the revisional jurisdiction with regard to that assessment year.
4. In respect of the assessment year 1995–96, the revision was in respect of the assessment to tax of the sum of Rs. 4,57,100 which had been shown in the return as accrued interest received by the assessee on Candoubles, which had been purchased by the assessee during the financial year ended March 31, 1990. Those Candoubles were redeemed in the assessment year 1996–97, and the entire amount received in that year less the allowable deductions was computed as capital gain. That sum included the amount which had been shown as accrued interest in the earlier years, and on which tax had been paid. The assessee initially filed an appeal against the assessment order for 1996–97, later that appeal was withdrawn on July 14, 1999. A certified copy of that order was received by him on August 7, 1999. The revision petition was filed on September 27, 1999. The assessment order for the year 1995–96 had been made earlier on March 31, 1998. The delay was from the expiry of one year from March 31, 1998, to September 27, 1999, as the revision petition was required to be filed within one year as provided in section 264(2) of the Act.
5. The delay of about five months has been held to have been not properly explained by the Commissioner. It is the case of the assessee that the need for filing a revision arose only after it was found that the amount received by the assessee for the Candouble was required to be treated as capital gain in the year of receipt and, consequently, the accrued interest on which tax had been paid for the earlier years had been wrongly included in those years as his income. The assessee, therefore, claimed that though he had filed an appeal, after having realised the true position in law, he paid the tax on the capital gain, and the appeal was dismissed by order dated July 14, 1999, of which a certified copy was received in early August. Counsel submits that the delay, if any, is required to be computed only from that date, and not earlier.
6. The delay, which the assessee was required to explain, is indeed the period from the expiry of period of one year from the date on which the order sought to be revised was made. While considering the question of condonation, the revisional authority, is not to altogether exclude from consideration the merits of the revision petition. If the cause of justice requires that a liberal view be taken, then a liberal view would indeed be warranted while considering the question of condoning the delay. The case of the assessee being that the same receipt has been taxed twice over once by way of accrued interest and for the second time by way of capital gain has not been found to be incorrect even prima facie. In matters where refunds are involved and the assessee's right to such refund is beyond any reasonable doubt, a liberal view of the conditionalities subject to which the relief can be granted is warranted. It is not the policy of the Act to enable the State to collect monies from citizens and retain the same even when the money is not required to be paid as tax. The fact that the payment had been made erroneously cannot by itself be allowed to stand in the way of the relief being granted to the assessee, if relief is permissible by the exercise of a discretionary power vested in the statutory authorities. The discretion so vested is required to be exercised in a manner which would protect and promote the just interest of the assessee. The position of the assessee vis-a-vis the Revenue is not strictly adversarial, although more often than not, that is the manner in which the two parties perceive their role. The Revenue is not to be regarded as interested in scoring points against the assessee, but only in the just enforcement of the provisions of the Act. The discretion of the authority, therefore, on the facts of this case, was required to be exercised by bearing the aforementioned considerations in mind.
7. The writ petitions are allowed in part, the impugned order for the assessment year 1995–96 is set aside and the matter is remitted back to the Commissioner for fresh consideration in accordance with law, and in the light of the observations made in this order. No costs. Consequently, W.M Ps. are dismissed.