Once it is established that the order under Section 263 was made/passed within the period of two years from the end of the financial year, such an order cannot be said to be beyond the period of limitation prescribed under Section 263 (2) of the Act. as upheld by the Hon’ble Supreme Court through the learned bench lead by Justice M.R Shah in the case of The Commissioner of Income Tax, Chennai v. Mohammed Meeran Shahul Hameed (CIVIL APPEAL NO.6204 OF 2021).
The brief facts of the case are that the Assessing Officer passed an assessment order under Section 143 (3) of the Income Tax Act for the assessment year 200809. The Commissioner of Income Tax initiated revision proceeding under Section 263 of the Act to revise the assessment order passed by the learned Assessing Officer and issued a notice to the assessee respondent herein. The respondent filed written submissions stating the assessment order made under Section 143 (3) of the Act was held to be erroneous and prejudicial to the interest of the revenue. The learned Commissioner set aside the assessment order with a direction to Assessing Officer to make necessary enquiries on the aspects mentioned in the order under Section 263.
The assessee – respondent herein filed an appeal before the learned ITAT submitting that it had come to know about the revision order only when he received notice under Section 143 (2) read with Section 263 of the Act from the office of the Assessing Officer. Vide order dated 04.04.2013 the learned ITAT accepted the contention on behalf of the assessee – respondent herein and allowed the appeal filed by holding that the revision order passed by the learned Commissioner was passed beyond the period of limitation. Feeling aggrieved and dissatisfied with the order passed by the learned ITAT the revenue – appellant herein preferred appeal before the High Court, raising the question that whether the Tribunal was right in holding that the revision order of the Commissioner of Income Tax under section 263 is barred by limitation.
By the impugned judgment and order, the High Court has dismissed the said appeal and has confirmed the order passed by learned ITAT holding that the order passed by the learned Commissioner under Section 263 of the Act was barred by limitation. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the appellant herein has preferred the present appeal.
Shri Vikramjit Banerjee, learned Additional Solicitor General appearing on behalf of the appellant has vehemently submitted that the High Court as well as the learned ITAT both have misconstrued and misinterpreted the provisions of Section 263. The order under Section 263 was served on the respondent herein on 29.11.2012 which was after the expiry of two years from the end of the financial year in which the order was sought to be revised. It is vehemently submitted by learned ASG that subsection (2) of Section 263 of the Act provides that no order shall be ‘made’ under subsection (1) of Section 263 after the expiry of two years from the end of the concerned financial year and the relevant date in the present case to pass the order under Section 263 would be 31.03.2012.
Shri R. Sivaraman, learned Advocate appearing on behalf of the respondent – assessee has submitted that as such the order passed by the learned Commissioner under Section 263 of the Act has been acted upon before it was set aside by learned ITAT and thereafter a fresh assessment order has been passed by the Assessing Officer.
After hearing the learned counsel on behalf of the respective parties at length, the Hon’ble Court held that “The question of law framed is answered in favour of the revenue – appellant and against the assessee – respondent herein and it is held that the order passed by the learned Commissioner under Section 263 of the Income Tax Act was within the period of limitation prescribed under subsection (2) of Section 263 of the Act. The present appeal is allowed accordingly.”
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Judgment reviewed by Vandana Ragwani
