Pr. CIT u/s 263 empowered to review orders passed by JCIT – High Court

Pr. CIT u/s 263 empowered to review orders passed by JCIT as Section 263 is inclusive one 

In a recent judgment, the Hon’ble High Court has held that Section 263 of the Income Tax Act, is inclusive one and include jurisdiction of the Pr.CIT to review the orders passed by the JCIT under Section 271 (D) and 271(E).

ABCAUS Case Law Citation:
ABCAUS 4055 (2024) (05) HC

The appellant assessee had challenged both, the order passed by the Pr. Commissioners of Income Tax (Pr. CIT) as well as affirmation order by the Income Tax Appellate Tribunal confirming the order passed by the Pr.CIT whereby the order passed under Section 271(D) of the Income Tax Act by the JCT was reviewed and penalty orders passed by the JCIT were held to be erroneous and prejudicial to the interest of revenue. The order passed by the JCIT was cancelled.

Before the Hon’ble High Court the case of the assessee was that the powers contained in section 263 of the Act, excludes the jurisdiction of the Pr. CIT to review the orders passed by the JCIT under Section 271 (D) and 271(E).

The assessee relied upon the explanation 1 to Section 263 to submit that, the instant mention in explanation would be only in the cases where the Pr.CIT would be empowered to review the orders of the CIT. He submitted that in this case, the appellant was not falling under Section 140 of the Act.

The Hon’ble High Court observed that the explanation does not supersede or exclude the main provision of Section 263 (1), it only explains circumstances wherein orders passed in specific matters relating to various sections provided therein, can also be looked into. It is an inclusive clause and is not exclusive one. Thus, the word “any proceedings under this Act as provided under Section 263(1)” will apply to all the proceedings which may be passed under the Act, which would include orders passed under Section 271(D) as well as under Section 271 (E) by the Joint Commissioner of Income Tax.

Accordingly, the Hon’ble High Court held that the powers exercised by the Pr. Commissioner Income Tax, do not warrant any interference and the appeals filed by the appellant, were rightly rejected by the ITAT and no case for interference was made out.

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