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The Commissioner of Income Tax, Chennai vs. Mohammed Meeran Shahul Hameed - (Supreme Court) (07 Oct 2021)

Receipt of the order passed under Section 263 of the IT Act by the assessee has no relevance for the purpose of counting the period of limitation

MANU/SC/0813/2021

Direct Taxation

The Assessing Officer (AO) passed an assessment order under Section 143 (3) of the Income Tax Act ( IT Act) for the assessment year (AY) 2008-¬09 vide assessment order. The Commissioner of Income Tax initiated revision proceeding under Section 263 of the IT Act to revise the assessment order passed by the learned Assessing Officer and issued a notice to the assessee ¬ Respondent. The assessee – respondent herein filed written submissions. The learned Commissioner passed an order under Section 263 of the IT Act holding that, the Assessing Officer had failed to make relevant and necessary enquiries and to make correct assessment of income after due application of mind and thus the assessment order made under Section 143 (3) of the IT 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 of the IT Act.

The order passed by the learned Commissioner in exercise of powers under Section 263 of the IT Act was challenged by the assessee – respondent herein before the learned ITAT. Vide order, the learned ITAT accepted the contention on behalf of the assessee – Respondent herein and allowed the appeal filed by the assessee by holding that the revision order passed by the learned Commissioner was passed beyond the period of 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 IT Act was barred by limitation. The High Court held that the date on which the order was received by the assessee – respondent herein is the relevant date for the purpose of determining the period of limitation under Section 263 (2) of the Act.

As mandated by sub¬section (2) of Section 263 of the IT Act, no order under Section 263 of the IT Act shall be “made” after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. Therefore the word used is “made” and not the order “received” by the assessee. Even the word “dispatch” is not mentioned in Section 263 (2) of the IT Act. Therefore, once it is established that the order under Section 263 of the IT Act was made/passed within the period of two years from the end of the financial year in which the order sought to be revised was passed, such an order cannot be said to be beyond the period of limitation prescribed under Section 263 (2) of the IT Act. Receipt of the order passed under Section 263 of the IT Act by the assessee has no relevance for the purpose of counting the period of limitation provided under Section 263 of the IT Act.

In the present case, the order was made/passed by the learned Commissioner on 26th March, 2012 and according to the Department, it was dispatched on 28th March, 2012. The relevant last date for the purpose of passing the order under Section 263 of the IT Act considering the fact that the assessment was for the financial year 2008¬09 would be 31st March, 2012 and the order might have been received as per the case of the assessee – Respondent on 29th November, 2012. However, the date on which the order under Section 263 of the IT Act has been received by the assessee is not relevant for the purpose of calculating/considering the period of limitation provided under Section 263 (2) of the IT Act. Therefore the High Court has misconstrued and has misinterpreted the provision of sub¬section (2) of Section 263 of the IT Act. The word used is “made” and not the “receipt of the order”. As per the cardinal principle of law, the provision of the statue/act is to be read as it is and nothing is to be added or taken away from the provision of the statue. Therefore, the High Court has erred in holding that, the order under Section 263 of the IT Act passed by the learned Commissioner was barred by period of limitation, as provided under sub¬section (2) of Section 263 of the IT Act.

The order passed by the learned Commissioner under Section 263 of the IT Act was within the period of limitation prescribed under sub¬section (2) of Section 263 of the IT Act. The present appeal is allowed.

Tags : INCOME   ASSESSMENT   TIME PERIOD  

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