JUDGMENT
R. R. JAIN, J.
Since both these appeals involve a common question of law, namely scope and interpretation of s. 264(4)(c) of the IT Act, hereinafter referred to as the Act, they are disposed of by this common judgment. However, for the sake of convenience, the facts and figures as referred and giving rise to WA No. 921/94 are only referred hereunder.
2. The appellant is a public limited company carrying on business of manufacture and sale of cloth. Necessary income returns were submitted for the asst. yr. 1975-76. The second respondent, ITO, Companies Circle-I, Coimbatore, completed the assessment by his order dt. 20th March, 1978. Aggrieved by that order, the appellant preferred an appeal before the CIT(A), disputing addition in the income to the tune of Rs. 3,73,541 though, according to the appellant, was not an income defined under the IT Act. The CIT, the first respondent accepted the contention and allowed the appeal by his order dt. 28th Oct., 1978, and thus the liability to pay income-tax was reduced proportionately. As the second respondent, assessing authority also levied interest under s. 215 of the Act, the appellant also filed revision application for consequential order, i.e. for corresponding reduction in the amount of interest, and the same was allowed by an order dt. 28th Oct., 1978, by giving benefit of reduction in interest liability owing to revised assessment in the nature of reduction in assessable income.
3. After some time, the appellant preferred second revision application dt. 9th Jan., 1979 before the CIT, the first respondent, challenging the same order claiming. (a) grant of depreciation at the rate of 20 per cent instead of 10 per cent as allowed initially by the assessing authority; and (b) deduction of Rs. 6,20,023 being incremental liability towards gratuity for the relevant assessment year.
4. The first respondent, CIT passed order dt. 19th June, 1982, rejecting the petition on the ground of maintainability in view of the prohibition contained in s. 264(4)(c). Challenge to the order of rejection dt. 19th June, 1982 passed by the first respondent was the subject-matter of Writ Petn. No. 9293/83. The learned single judge, by his order dt. 23rd March, 1994, dismissed the writ petition, confirming the order of rejection passed by the first respondent. Feeling dissatisfied, the appellant has invoked appellate jurisdiction by preferring the present appeal.
5. The learned counsel for the appellant has vociferously argued that as the subject-matter of the revision, namely depreciation and reduction in realisation of incremental liability towards gratuity was not the subject-matter of the appeal before the CIT(A), the first respondent, the grievances in revision ought to have been considered in accordance with law. Further, the disputes not having been appealed against, even the first respondent could have exercised suo motto power under s. 215 of the Act independent of any other proceedings. To repel this contention, the learned counsel for the respondents has pleaded specific bar under s. 264(4)(c) of the Act, and justified the rejection order.
6. In our view, it would be worthwhile to pen down provisions of s. 264(4) in order to appreciate rival contentions. Sec. 264(4) of the Act reads as under.
The CIT shall not revise any order under this section in the following cases-
(a) where an appeal against the order lies to the Dy. CIT(A) or to the CIT(A) or to the 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 CIT(A) or to the Tribunal, the assessee has not waived his right of appeal, or
(b) where the order is pending on an appeal before the Dy. CIT(A); or
(c) where the order has been made the subject of an appeal to the CIT(A) or to the Tribunal. ”
7. The text of cl. (c) of sub-s. (4) of s. 264 of the Act is self-explanatory. Even on plain reading thereof, it is evidently clear that where an order has been made the subject-matter of an appeal to the CIT(A) or to the Tribunal, the CIT is not empowered to revise such an order. In this case, it is an undisputed fact that the appellant had preferred an appeal against the order of assessment and claimed deduction of Rs. 3,73,241. It is true that the disputes raised in the revision were not at all raised in that appeal. But, the fact remains that the order under appeal was a composite order, dealing with all these disputes and when challenged, shall be deemed to have been examined by the first respondent while exercising appellate jurisdiction. The word ‘order’ used in cl. (c) of sub-s. (4) denotes an order in its entirety and not in piecemeal. It is immaterial whether only a part of that order was challenged. In our view, the provision is very clear and provides an express bar and prohibition against exercising revision jurisdiction in a case where the order has already been made the subject-matter of an appeal. Under these circumstances, we do not find that the interpretation as to above pronouncements (sic). Of course, in support of his submissions, the learned counsel has relied upon several judgments which were also cited before the learned single judge. The learned judge has already dealt in detail with all these judgments and has come to an unimpeachable conclusion that in such circumstances, revision is not maintainable. On facts, we also find no reason to interfere with the finding of the learned judge since sans any infirmity, illegality or a patent error.
8. The scheme of providing express bar and prohibition in entertaining revision application where the order had already been made a subject-matter of appeal is also consistent with the basic principles of CPC, as relating to civil litigation. Under the procedural law also, multiplicity of litigation in respect of same cause of action is deprecated and discouraged. The object of such rule is to avoid multiplicity and prevent further litigation. The entire claim arising from the same cause of action should get be adjudicated in the same proceedings. Such bar is contained in Order 2, r. 2 of the CPC, and if the plaintiff omits to agitate or intentionally relinquishes any portion of claim arising from the same cause of action, he shall be precluded from agitating in another litigation in another proceeding, the portion so-omitted or relinquished. This bar is also based on the principle that the party resisting claim should not be vexed again and again for the same cause of action.
9. Even remotely, the provisions of s. 11, CPC can also lend support to the express prohibition contained in s. 264(4)(c). Sec. 11 of the CPC deals with principles of res judicata. It provides an express bar to try the same issue which was directly or substantially in issue between the same parties in a former proceeding. This rule casts an obligation upon party agitating rights to raise all the grounds of defence or attack available in a particular proceeding and if the party fails to include the grounds of defence or attack, which otherwise ought to have been made in the former proceedings, should be precluded from raising such grounds of attack or defence in any other proceeding. This principle is known as the principle of constructive res judicata as contained in Expln. IV to s. 11 of CPC. Expln. IV reads as under-
Any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit”.
10. The cause of action is original assessment order disallowing certain claims. The order of assessment had already been challenged once in appeal and therefore applying above principles to the case in hand, while preferring appeal, the appellant ought to have attacked the order in all the grounds available including the grant of depreciation or deduction of a sum of Rs. 6,20,023 being the amount of incremental liability towards gratuity. This finding is also a part of said composite order and is inseparable from the rest of the order.
11. For the reasons stated above, we affirm the judgment under appeal and hold that the first respondent rightly rejected the second revision application exercising powers under s. 264(4)(c) of the Act. Thus, we find no merit in these appeals and dismiss the same with no order as to costs.