Rajendra Babu, J. - (1.) The appellant before us is M/s. Hindustan Aeronautics Ltd., which is a wholly centrally owned Government Company engaged in the manufacture of aeroplanes and its parts. For the assessment year 1970-71 the appellant filed its return before the concerned ITO who by an order made on March 15, 1973 completed the assessment by disallowing certain deductions claimed by the appellant on various grounds. Against the assessment order of the ITO, the assessee filed an appeal before the Appellate Assistant Commissioner who by an order made on October 27, 1976 partly allowed the same. By the order of the Appellate Assistant Commissioner, both the Revenue and the assessee preferred second appeals before the Income-tax Appellate Tribunal, Bangalore to the extent each one of them was aggrieved. However, on May 9, 1977, the assessee withdrew its appeal before the Tribunal with liberty reserved to it to approach the Commissioner of Income-tax (Commissioner) in a revision under Section 264 of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). On May 20, 1978 the Tribunal however, dismissed the appeal filed by the Revenue on merits.
(2.) The assessee filed revision petition on May 19, 1977 under Section 264 of the Act to the extent of the grievance projected before the Tribinal earlier. On 22-12-1978 the Commissioner dismissed the revision petition on the ground that he has no power to revise any order under Section 264 as the order had been made the subject to an appeal to the Appellate Tribunal.
(3.) A writ petition (No. 4803/79) was filed challenging this order made by the Commissioner. The learned single Judge, who considered the matter, directed the Commissioner to entertain the revision petition filed by the assessee in terms of Circular No. XVI/11/69 issued by the Central Board of Direct Taxes (hereinafter referred to as 'the Board) and examine its case on merits. Aggrieved by that order, an appeal was preferred by the Commissioner before the Division Bench.;