Period of limitation u/s 263(2) is date of order passed by CIT not date of receipt of order – SC

Period of limitation of Revisional order u/s 263(2) is date of order passed by Commissioner and not date when order is received by assessee – SC

ABCAUS Case Law Citation
ABCAUS 3554 (2021) (10) SC

In the instant case, the Revenue had challenged the order passed by the Hon’ble High Court confirming the order of the ITAT holding that the Revisional order passed by Commissioner under Section 263 of the Income Tax Act, 1961 (the Act) was barred by limitation.

The CIT had held 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 Act was erroneous and prejudicial to   the interest of the revenue. The Commissioner set aside the assessment order with a direction to Assessing Officer to make necessary enquiries on the specified aspects.

The assessee filed an appeal before 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. Thereafter, the the assessee had requested the   Assessing Officer to furnish the copy of the order passed by the Commissioner which was supplied to him after the limitation period.

Before the ITAT, the case of the assessee was that the order passed by Commissioner was beyond the period   of limitation prescribed/mentioned under Section 263 (2) of the Act.

The ITAT accepted the contention of the assessee and allowed the appeal. The Hon’ble High Court dismissed   the appeal of the Revenue and confirmed the   order passed by learned ITAT.

Before the Hon’ble Supreme Court, the Revenue submitted that the High Court erred in holding that the revision order was barred by period of limitation provided   under Section 263 (2) of the Act.

The question was whether the High Court was right in   holding that the relevant date for the purpose of considering the period of limitation under Section 263(2) of the Act would be the date on which the order passed   u/s 263 by Commissioner is received by the assessee?

The Hon’ble Supreme Court stated that on a fair reading of sub­ section (2) of Section 263 it can be seen that as mandated by sub­section (2) of Section 263 no order under Section 263 of the 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). Therefore, 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 in which the order sought to be revised was passed, such an order can not be said to be beyond the period of limitation prescribed under Section 263(2) of the Act.

The Hon’ble Supreme Court held that the receipt of the order passed under Section 263 by the assessee has no relevance for the purpose of counting the period of limitation provided under Section 263 of the Income Tax Act.

The Hon’ble Supreme Court stated that as per the   cardinal principle of law 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.

Accordingly, the appeal was allowed.

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