Chandrakantaraj Urs, J.
1. Petitioner Hindustan Aeronautics Limited is an assessee under the IT Act, 1961, (hereinafter referred to as the Act.)
2. For the asst. yr. 1970-71 relating to the financial year ending 31-3-1969, the petitioner filed an appeal before the AAC of It against the assessment order of the ITO. The appeal was on several grounds relating to several aspects of the assessment order with which the assessee was aggrieved. The appeal came to be partly allowed and partly disallowed by the AAC by his order dt. 27-10-1976. Petitioner assessee filed an appeal against the order of the AAC, to the extent the appeal was disallowed, before the Tribunal at Bangalore. The appeal before the Tribunal came to be withdrawn with the permission of the Tribunal on 9-5-1977 and on 17-5-1977 a revision application came to the filed u/s 264 of the Act before the CIT, Karnataka, Bangalore the respondent herein - against the order of the AAC to the extent the assessee petitioner was dissatisfied with that order. In the meanwhile the Department had filed an appeal before the Tribunal against the order of the AAC in so far as related to some aspects of the success of the assessee. That appeal of the Department came to be dismissed by the Tribunal on 28-3-1978. The respondent - Commr. by his order dt. 22-12-1978, having regard the Ruling of Kerala High Court in the case of Mohammed Haneef v. ITO, Quilion and others (1973) Tax 645 (Ker) dismissed the revision petition of the assesses-petitioner as not competent and maintainable. Having no other alternative remedy, the petitioner has approached this Court u/Art. 226 of the Constitution for redress.
3. It is petitioner's contention that sub-s. 4(c) of s. 264 of the Act is no bar for the assessee to maintain a revision petition against the order of the AAC in so far as it affects the assessee even though the Department may subject that order in so far as it favours the assessee to an appeal before the Tribunal not with standing the decision of the Kerala High Court in Mohammed Haneef's case which has not laid down the correct law in regard to scope and ambit of revisional power of the Commr. u/s 264 of the Act.
4. It is also petitioner's contention, it was denied an opportunity hearing on 20-11-1978 and had it been given then it would have brought to the notice of the respondent - Commr. the circular instructions of the CBDT hearing F. No. 6/52/68-ITJ dt. 30-7-1970 which clearly explained that a Departmental appeal to the Tribunal against an assessment order would not deprive the assessee of his right to move the Commr. u/s 264 of the Act and the said instruction being binding in nature on the Commr. he had wrongfully declined to exercise his jurisdiction.
5. In so far as the first of the contention is concerned, Shri G. Sarangan ld. Counsel for the petitioner has analysed the language of the provisions of s. 264 of the Act and submitted that the words, 'assessment order' occurring in sub-s. 4(c) of s. 264 of the Act should be read down or read restrictedly to mean and include that part of an assessment order which is made the subject of appeal before the Commr. (Appeals) or the Tribunal. He has emphasised the scheme of appeals and revision in the Act and has advanced forceful arguments to demonstrate that the decision of the Kerala High Court in Mohammed Haneef's case has not correctly laid down the law. But the Kerala High Court explained the scope of sub-s. 4 (c) of s. 264 of the Act following a Division Bench Ruling of the Madras High Court in the case of C. Gnanasundara Nayagar v. CIT, Madras (1961) 41 ITR 375 . In the said case the ld. Judges were construing s. 33A(2) of the IT Act, 1923 corresponding to s. 264 of the Act.
6. Nearly the same arguments as advanced by Sri G. Sarangan before me were advanced by the Counsel for the assessee there. The ld. Judges, however, rejected the arguments and refused to construe the words 'assessment order' restrictedly. I am convinced that decision did not lay down the correct law. I say so with the utmost respect to the ld. Judges as many aspects underlying the scheme of the IT Act and a proper analysing as to what constitutes an appealable assessment order whether affecting the assessee or the Department was never argued before them. None the less I do not feel compelled to give reasons for my dissent on the facts of the case on hand, as the petitioner herein is bound to succeed on the second of the contentions. It is possible that Legislature itself may clear the doubt in regard to the interpolation of sub-s. 4(c) of s. 264 of the Act by suitable amendment in place of conflicting judicial pronouncements.
7. Whether the petitioner should have been heard on 20-11-1978 loses some of its importance. Whether the revision petitioner ought to bring to the notice of the respondent - Commr. the circular instructions of the CBDT is of little consequence. It should be presumed that all the CITs in the Country are aware of the instruction issued by the Board as they are all subordinate authorities in terms of s. 119 of the Act. Circular instructions relied upon by the petitioner is as follows :
'XVI/11/69 - Scope of Proviso (c) to s. 33A (2) of IT Act, 1922 and corresponding sub-s. (c) of s. 264(4) of It Act, 1961.'
The scope of the above noted provision was considered by the Ministry of law in a recent case, vide copy of their note dated 18-5-1970. They have held that the above noted provisions has to be construed so as to mean that the jurisdiction of the Commr. to entertain a revision petition from an assessee against an order could be barred only if as appeal against that order has been preferred by the assessee before the Tribunal and not where such an appeal has been preferred the Department. This legal position is brought to your notice.
(F. No. 6/52/68 - ITJ dt. 30-7-1970 from CBDT note recorded by the Ministry of law dated 18-5-1970).'
8. From the above it is clear, that s. 264 of the Act has been understood by the Board and the Law Ministry in a manner different that the High Court of Madras and the high Court of Kerala have construed the same. It is true that in interpreting statutes the High Courts are not bound or controlled by what a Government Agency may say. The Courts may ignore the views of the Government or its Agency. But having regard to the mandatory nature of the language of s. 119 of the Act and instant case not being covered by the exceptions in the proviso to sub-s. (1) of s. 119, the respondent Commr. was bound to entertain the revision application of the petitioner, not with standing the decision of the Kerala High Court on the subject as he was not bound by it. Thus there is failure on the part of the respondent to exercise jurisdiction vested in him in passing the impugned order and, therefore, that order is liable to be set aside.
9. I may further observe that on that date the revision petition was dismissed i.e., on 22-12-1978, AAC's order appealed by the Department before the Tribunal was not the subject of an appeal before the Tribunal as the same had been dismissed on 28-3-1978, nearly 9 months before.
10. In the result rule in made absolute. The impugned order is set aside and the matter remitted to the respondent with a direction to entertain the revision application of the petitioner pertaining to asst. yr, 1970-71 and dispose of the same on merit in accordance with law.
11. There will be no order as to costs.