Law:

Section:

Article 226 of the Constitution of India - Writ - Maintainability of - Assessee-firm filed return disclosing certain credits belonging to two persons and claimed these to be non-taxable on ground that these represented recoveries of bad debts originally written off by another firm which had been taken over by assessee - It further claimed deduction of expenses incurred on repairs to roads and buildings - ITO taxed both aforesaid credits and also disallowed part of repair expenditure treating it as capital in nature - AAC dismissed assessee's appeal - Thereafter, instead of filing second appeal before Tribunal, assessee filed revision petition under section 264 before Commissioner who dismissed it - Whether Commissioner's power of revision was part of appellate jurisdiction and, consequently, subject to judicial review under article 228, so that assessee's writ against Commissioner's order was maintainable - Held, yes -Whether Commissioner's findings in both cases were on questions of fact and as such interference with them in exercise of extraordinary jurisdiction under article 226 was not warranted - Held, yes Facts The assessee, a registered partnership firm, filed its return disclosing certain credits from two persons, which it claimed to be non-taxable on the ground that they were only recoveries of bad debts earlier written off by another firm which had been later taken over by it. The assessee also claimed deduction of certain expenses incurred on repairs to roads and buildings as revenue expenditure. The ITO not only rejected the assessee's claim in respect of the abovementioned credits and brought them to tax but also disallowed Rs. 5,000 out of the repair expenses as capital expenditure. The AAC dismissed the assessee's appeal. Thereafter, instead of filing a second appeal before the Tribunal the assessee challenged the orders of the ITO and the AAO in revision under section 264 before the Commissioner who also dismissed the same. On the assessee's writ under article 226, the revenue challenged the maintainability of the writ and also supported the orders of the lower authorities on merits. Held Section 264 provides for a revision by the Commissioner…

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