Date of Judgement:
07 October 2021
Coram:
Justice M R Shah
Justice A S Bopanna
Parties:
Appellant – The Commissioner of Income Tax, Chennai
Respondent – Mohammed Meeran Shahul Hameed
Subject
Date of receipt of order should not be considered under Section 263(2) of the Income Tax Act rather the date of order should be considered for computing limitation.
Legal Provisions
- Section 262(2) of the Income Tax Act, 1961 - No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.
Overview
- The assessment officer passed an order for the financial year 2008-2009 on 30.12.2010 against which the Commissioner of Income Tax triggered a revisional proceeding under Section 263 of the Act and passed an order on 26.03.2012 holding that the assessment officer did not make necessary enquiries and ordered for making necessary enquiries.
- The respondent challenged the revisional order before the Income Tax Appellate Tribunal (ITAT) that the respondent was aware of the order only on 06.08.2012. Therefore, the respondent contended that the order passed was barred by limitation under Section 263(2). The ITAT accepted this contention and set aside the order of Commissioner of Income Tax. The High Court also agreed with the tribunal in appeal before this court preferred by the Commissioner of Income Tax.
- The counsel for the appellant argued before this court that the tribunal and the High Court have grossly misinterpreted Section 263(2). The counsel argued that the section stated that there shall be no order made, hence date of order must be considered for calculating and not the date of receipt of the order. Therefore, the order of the Commissioner is valid.
Issue
- Whether the tribunal and High Court were right in holding that the date for consideration for calculating limitation under section 263(2) is the receipt of the order of the Commissioner of Income Tax.
Judgement Analysis
- The court while examining Section 263(2) agreed with the contention of the appellant. On bear reading of the section, it states that the order should be made with two years from the financial year the assessment officer’s order and it did not provide the words received or dispatch. Hence, the date should be calculated from the date of order.
- The court also held that it will be in violation of the statue if high court add which would not be in line with the section. The provision should be read and interpreted as provided and nothing should be changed by adding or taking away from the section.
- Hence, the court allowed the appeal and set aside the order and judgement of both the tribunal and high court held the revision order of the Commissioner of Income Tax valid.
Conclusion
The date of recipient of order under Section 263 is not relevant and not to be considered for calculating limitation period. The provision should be read as provided and the courts cannot impose its views in violation of the objective of the section.
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Questions
1. Which Section in the Income Tax Act, 1961 provides for revision of orders prejudicial to revenue?
2. Under Section 262(3), whether receipt of order should be considered or the date of order should be considered for calculating the limitation period?
