R.M. Sahai, J. - (1.) BY this petition filed under Article 226 of the Constitution of India, the principal relief sought is the quashing of the order dated 31st October, 1979, passed by the Commissioner dismissing a revision filed under Section 264 of I.T. Act, against the order dated 28th March, 1978, passed by the ITO disallowing registration to the petitioner under Section 185(5), as infructuous because the impugned order had been the subject of an appeal to the Commissioner (Appeals) even though it was dismissed on 12th September, 1979, as barred by time.
(2.) IN order to assail the correctness of this order the petitioner has taken recourse to arguments both on merits and tecnicalities. It is urged that the revision having been fixed for hearing on 12th November, 1979, the Commissioner committed an error apparent on the face of the record in dismissing it on 31st October, 1979, on communication of written reply to the query made by the Commissioner as to whether the petitioner had filed an appeal. We, however, do not consider it necessary to examine this aspect as we are satisfied that the other argument advanced, that the Commissioner acted against law in refusing to entertain revision on an erroneous construction of Sub-clause (c) of Sub-section (4) of Section 264 of the Act, appears to be well founded. Section 264 empowers the Commissioner to revise any order passed by an authority subordinate to him either on the application of the assessee or suo motu. Sub-section (4), however, takes away this jurisdiction, if the remedy to file appeal is available or it is pending. Further, in cases where an order has been made the subject of an appeal to the Commissioner (Appeals) or the Tribunal the jurisdiction of the Commissioner to examine the correctness or otherwise of such order is completely excluded. In this petition we are concerned with this last aspect, namely, whether the jurisdiction of the Commissioner was barred even if the appeal was dismissed as barred by time. In other words, could the dismissal of an appeal by the Commissioner (Appeals) result in the order of ITO having been made the subject of an appeal within the meaning of Clause (c) of Sub-section (4). For deciding this controversy it is necessary to extract the sub-section which runs as under : "The Commissioner shall not revise any order under this section in the following cases- (a) where an appeal against the order lies to the Appellate Assistant Commissioner or to the Commissioner (Appeals) or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired or, in the case of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal; or (b) where the order is pending on an appeal before the Appellate Assistant Commissioner ; or (c) where the order has been made the subject of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal." It is obvious that the answer to the question shall depend on the construction of the expression," order has been made the subject of an appeal" used in Clause (c). It shall be noticed that the two Sub-clauses (b) and (c) of the sub-section use different language. In one the jurisdiction is barred if the appeal is pending whereas in the other if it has been made the subject of an appeal. But the bar imposed by Clause (b) is lifted once the appeal has been decided because the AAC, by yirtue of Expln. (2), is an authority subordinate to the Commissioner. This does not happen in a case where the appeal has been decided by the Commissioner (Appeals) or the Tribunal as they are authority of either co-ordinate or higher jurisdiction except, of course, in administrative matters. If it would not have been so, it would have resulted in conflicting orders passed by authorities of the same or even higher jurisdiction. It could not have been the intention. The Legislature, therefore, to avoid any conflict or anomaly, enacted this sub-clause.
(3.) WE may now consider if the dismissal of an appeal on the ground of limitation results in the order having been made the subject of an appeal. Before answering this we may point out that where Legislature confers more than one remedy then the provisions have to be construed in a manner in which the intention of the Legislature is carried into effect and not so as to frustrate it. Moreover, a provision excluding jurisdiction must be construed strictly. The apparent intention of Section 264 appears to he to enable an assessee to get the correctness of an order passed by the ITO examined either by the Commissioner (Appeals) under Section 246 or by the Commissioner under Section 264. That is, at least one higher authority may examine it on merits. If Clause (c) is construed in the manner as it has been done by the Commissioner it would result in negativing the remedy of an assessee which would be contrary to the intention of the Legislature. It is urged on behalf of the Commissioner that once an appeal was filed, entertained and dismissed as barred by time the order passed by a subordinate authority stood affirmed and it would amount to an order which has been made the subject of an appeal. According to learned counsel the remedy of the petitioner to approach the Commissioner, therefore, under Section 264 was barred. At the first impression the argument did appear to be attractive. But, on the intention of Legislature and language of the section, we are not inclined to accept it. Appeal, in ordinary sense, means taking the order to a higher authority for examination of its correctness. Where an appeal is dismissed as barred by time or because it was deficiently stamped or it was not presented before the appropriate authority, it may result in finality of order passed by a subordinate authority and may even operate as res judicata but it cannot be considered to have been examined by a higher authority. An order passed in appeal and order having been the subject of an appeal appear to convey different senses. Dismissal of appeal as barred by time is an order passed in appeal against an order of the subordinate authority whereas a decision of a higher authority on merits results in the order having been made the subject of an appeal. The jurisdiction of the Commissioner could be barred under this provision only if the validity or the soundness of the order passed by a subordinate authority has been adjudicated upon by the Commissioner (Appeals). In our opinion, "subject of an appeal" must be understood as adjudication or decision on merits. It may be that for approaching a higher authority even an order dismissing an appeal as barred by time may be construed as an order passed in appeal but that does not amount to the order of having been made the subject of an appeal.;