Limitation Period to pass revisionary order u/s 263 stood extended by TOLA 2020
In a recent judgment, Hon’ble Orissa High Court has upheld that limitation Period to pass revisionary order u/s 263 stood extended by TOLA 2020. Competence of the Legislature through Parliament to relax provisions in earlier specified Acts legislated by it, is outside scope of the appellate jurisdiction of the High Courts.
ABCAUS Case Law Citation:
4237 (2024) (08) abcaus.in HC
In the instant case, the assessee had challenged the order passed by the ITAT in confirming that the revisionary order passed by PCIT u/s 263 was within the time limit as provided under Income-tax Act, 1961 read with the Taxation and other laws (Relaxation and amendment of certain provisions) Act, 2020 (TOLA, 2020).
In the instant case the assessment year involved was 2015-16. The original assessment order was passed u/s 143(3) on 18.12.2017. It was the submission of the assessee that an order of revision u/s 263 of the Act could have been passed within the period of limitation by 31.3.2020 being the period of two years from the end of the relevant assessment year in which the order was passed.
Before the ITAT, It was submitted that the show cause notice u/s 263 of the Act was issued on 26.2.2021 and the order was passed only on 18.3.2021. It was the submission that the limitation had been extended in respect of certain proceedings of the Income tax Act by The Taxation and other laws (Relaxation and amendment of certain provisions) Act, 2020. However, the provisions provided for extension of limitation are in respect of completion of any proceedings or passing of any order or issuance of any notice, etc, which falls during the period 20.3.2020 to 31.12.2020 stood extended to 31.3.2021. It was the submission that as the period of limitation itself had expired by the time the notice u/s 263 had been issued, the proceedings u/s.263 and consequential order was liable to be annulled. It was further submitted that the Taxation and other laws (Relaxation and amendment of certain provisions) Act, 2020 does not refer to the provisions of section 263 of the Act and, therefore, it cannot be said that said extension provided by TOLA 2020 extended the limitation provided under the provisions of section 263 of the Act.
To support its contentions, the assessee placed reliance on the decision of Hon’ble Supreme Court.
However, the Tribunal held that in terms of clause 3(1) and 3(1)(a) of TOLA 2020 the limitation for the purpose of passing the order also stood extended and the notice issued u/s 263 and the order passed u/s.263 was within the period of limitation.
Before the Hon’ble High Court the assessee contended that Sub-section (2) in section 263 of the Act mandates prescribed period, within which an order of revision can be made. The period is limited to two years from end of the financial year, in which the order sought to be revised was passed. This is a mandatory provision. There can be no extension of the period by an Act of Parliament, seeking to relax the mandate. The only way the mandate can be relaxed is by amending the provision itself.
The assessee heavily relied upon the Bombay High Court, quoted by the Gujarat High Court in its judgment.
On query from Court the assessee could not demonstrate that there has been vires challenge to the provision in TOLA 2020. His information was that Special Leave Petition is pending before the Supreme Court.
The Hon’ble High Court perused the order of the Gujarat High Court, but it did not appear from relied upon passage that the Bombay High Court had said that the Legislature in relaxing provisions in specified earlier Acts, was not competent to do so neither the Gujarat High Court, in its judgment, went on to say so.
The Hon’ble High Court stated that in the special jurisdiction exercised by High Courts under section 260-A in Income Tax Act, 1961, appeals are to be admitted on there arising substantial question(s) of law from the order/judgment sought to be appealed against. On framing such question(s), the High Courts proceed to answer it or them, as a case there may be. The exercise requires interpretation of the law. Competence of the Legislature through Parliament to relax provisions in earlier specified Acts legislated by it, is outside scope of the appellate jurisdiction of the High Courts.
Accordingly, the appeal was dismissed being not involving any substantial question of law.
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