Revision Under Section 264 Is Maintainable Post-Limitation

Revision Under Section 264 Is Maintainable Post-Limitation Expiry If No Appeal Is Filed

Issue

Whether a revision petition filed under Section 264 of the Income-tax Act, 1961 (Section 378 of the Income-tax Act, 2025) is maintainable when the limitation period for filing an appeal against the assessment order has expired without any appeal or condonation application being filed, and whether an order dismissing such revision while making observations on merits warrants remand for fresh adjudication.

Facts

An assessment order was passed against the petitioner under Section 143(3) read with Section 144B.
The petitioner chose not to file a statutory appeal against the assessment order within the prescribed limitation period.
There was nothing on record to indicate that the petitioner had filed an appeal or submitted an application seeking condonation of delay.
The petitioner subsequently filed a revision application under Section 264 before the Revisional Authority.
The Revisional Authority dismissed the revision petition as not maintainable on the ground that an appeal lay against the assessment order, while simultaneously offering observations on the merits of the assessment.

Decision

In favour of assessee (Matter remanded): Held, yes; since the period of limitation for filing an appeal had already expired and no appeal or condonation of delay application was filed, the revision application under Section 264 was maintainable.
Held, yes; because the Revisional Authority’s observations on the merits were influenced by its overarching, erroneous view that the revision was non-maintainable, the interests of justice require setting aside the impugned order.
The matter is restored to the file of the Revisional Authority to decide the revision petition afresh on its merits in accordance with the law.

Key Takeaways

Maintainability of Revision Post-Limitation Expiry: A revision under Section 264 cannot be rejected as non-maintainable simply because the assessment order was appealable, provided the limitation period for filing an appeal has lapsed and no appeal is actually pending or filed.
Prejudice of Combined Ruling: When an authority wrongly holds a petition to be non-maintainable, any parallel findings made on the merits are tainted by that overarching premise and cannot stand.
Remand for Unbiased Re-adjudication: Where a revisional order suffers from a jurisdictional error regarding maintainability, the appropriate remedy is to quash the order and remand the matter for a complete, unbiased rehearing on the merits.

HIGH COURT OF JHARKHAND

Sri Kaushik Narayan Bhattacharya

Principal Commissioner of Income-tax

M.S. Sonak, CJ.
and Rajesh Shankar, J.

W.P.(T) No. 5992 of 2026

AUGUST 11, 2026

Rudra Pratap Singh and Prashant Jha, Advs. for the Petitioner. Vaibhav Kumar, Sr. SC, Durgesh Agarwal, Adv. and Ms. Saudamini Gupta, Jr. SC for the Respondent.

ORDER

1. Heard Mr Rudra Pratap Singh, who appears with Mr Prashant Jha for the petitioner and Mr Vaibhav Kumar for the respondents.

2. Rule. The Rule is made returnable immediately at the request of and with consent of the learned counsel for the parties.

3. The petitioner challenges the impugned order dated 14^th March, 2024 made by the Revisional Authority under Section 264 of the I.T. Act, 1961 (the said Act), dismissing the petitioner’s revision petition as not maintainable, but at the same time making some observations on the merits of the matter as well.

4. Mr Rudra Pratap Singh, learned counsel for the petitioner, submitted that the revision petition was maintainable under Section 264 of the said Act and, therefore, the conclusion that the same was not maintainable virtually amounts to a failure to exercise the jurisdiction vested in the Revisional Authority. He submits that in any event, the Revisional Authority, having reached the conclusion that no revision was maintainable, should not have adjudicated the merits of the rival contentions and made some observations thereon.

5. Mr Kumar Vaibhav, learned counsel for the respondents, submitted that even if it is assumed that a revision was maintainable, the same has been decided by the Revisional Authority on the merits. He submitted that there is no error in the decision on the merits and therefore, this Court should not interfere with the impugned order.

6. The rival contentions now fall for our determination.

7. The Revisional Authority has reasoned that the petitioner herein had the remedy of an appeal against an assessment order made under Section 143(3) read with Section 144 B of the said Act. Instead, the petitioner chose to prefer a revision under Section 264 of the said Act, and therefore, such revision was not maintainable.

8. From the perusal of Section 264 of the said Act, including sub-Section 4 thereof, we find that the circumstances in which revisional powers should not be exercised by the Revisional Authority have been clearly set out. Under sub-clause-A of Section 264 (4), it is provided that where an appeal against the order lies to the appellate authority but has not been made and the time within which such appeal may be made has not expired, or in case of an appeal to the Joint Commissioner (Appeals) or Commissioners (Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal, then, revisional powers would not be exercised.

9. In this case, the records show that the period of limitation for instituting an appeal against the assessment order had already expired. There was nothing on record to suggest that the petitioner had filed an appeal or any application seeking condonation of delay. There was no question of waiver in the present case. Therefore, in such circumstances, the Revisional Authority was not justified in refusing to exercise its revisional jurisdiction or in holding that the revision filed by the petitioner herein was not maintainable.

10. Generally, once the Authority concludes that it lacks jurisdiction, there is no question of the Authority making any observations on the merits of the matter. In this case, although it is correct that the Revisional Authority has made some observations on the merits of the matter, we find that such observations have been affected by the Revisional Authority’s overarching opinion that the revision itself was not maintainable.

11. Therefore, the interest of justice would be best served if the Revisional Authority’s impugned order dated 14.03.2024 is set aside and the matter is restored to the file of the Revisional Authority to decide the petitioner’s revision petition afresh on its own merits and in accordance with law. This time, however, this Revisional Authority should not be influenced by any of the observations made on merits in the impugned order dated 14.03.2024, which, in any case, is now being set aside.

12. Accordingly, this petition is disposed of by setting aside the Revisional Authority’s impugned order dated 14.03.2024 and directing the Revisional Authority to decide the petitioner’s revision petition against the assessment order dated 26.12.2022 afresh on its own merits and in accordance with law. The Revisional Authority, as indicated above, must not be influenced by any of the observations on merits contained in the impugned order dated 14.03.2024, which, in any event, is now set aside.

13. All contentions of all parties on merits of the matter are kept open for the decision by the Revisional Authority, since this Court has not examined such rival contentions.

14. Needless to add that the Revisional Authority would follow the principles of natural justice and fair play when disposing of the revision petition on merits and in accordance with law.

15. The Revisional Authority must endeavour to dispose of the revision petition as expeditiously as possible, preferably within six months from this order being communicated. Mr Kumar Vaibhav agrees to communicate this order to the Revisional Authority.

16. The Rule is made absolute in the above terms without any order for costs. All concerned should act on an authenticated copy of this order.