Time limit for passing a revision order under Section 263 should be calculated from the date of the original assessment order :Dismissal of SLP Challenging High Court Order

By | January 25, 2025
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Time limit for passing a revision order under Section 263 should be calculated from the date of the original assessment order :Dismissal of SLP Challenging High Court Order

Summary in Key Points:

  • Issue: Whether the Supreme Court should entertain a Special Leave Petition (SLP) filed by the revenue department challenging a High Court order regarding the time limit for passing a revision order under Section 263 of the Income-tax Act, 1961.
  • Facts: The High Court held that the time limit for passing a revision order under Section 263 should be calculated from the date of the original assessment order, not the date of a reassessment order. The revenue department filed an SLP against this decision, but with a delay of 180 days.
  • Decision: The Supreme Court dismissed the SLP, both on the grounds of delay and lack of merit.

Decision:

The Supreme Court dismissed the SLP filed by the revenue department. The court’s decision was based on the following:

  • Delay in Filing: The SLP was filed with a significant delay of 180 days, and the revenue department failed to provide a satisfactory explanation for this delay.
  • Lack of Merit: Even if the delay was condoned, the Supreme Court found no merit in the SLP. The High Court’s interpretation of the time limit for revision under Section 263 was found to be correct.

Important Note: This case highlights the importance of adhering to the time limits prescribed for filing appeals and revisions under the Income-tax Act, 1961. It also underscores the Supreme Court’s reluctance to interfere with High Court decisions unless there are compelling reasons to do so. The dismissal of the SLP due to delay and lack of merit reinforces the importance of timely action and the need for strong grounds to challenge a High Court’s decision.

SUPREME COURT OF INDIA
Principal Commissioner of Income-tax (PCIT)
v.
Chambal Fertilisers and Chemicals Ltd.
J.B. PARDIWALA and R. Mahadevan, JJ.
SPECIAL LEAVE PETITION (CIVIL) Diary No. 55796 of 2024
JANUARY  3, 2025
S. Dwarakanath, A.S.G., Rupesh Kumar, Sr. Adv., B.K. Satija, Ms. Seema Bengani, Mrs. Chandra Trikha, Advs. and Raj Bahadur Yadav, AOR for the Petitioner.
ORDER
1. There is a delay of 180 days in filing the Special Leave Petition which has not been satisfactorily explained. Even otherwise, we have gone through the Special Leave Petition and do not find any merit in the same.
2 The Special Leave Petition is, therefore, dismissed on the ground of delay as well as on merits.
Pending application(s), if any, stand disposed of.
__________________________________________
HIGH COURT OF RAJASTHAN
Chambal Fertilisers and Chemicals Ltd.
v.
Principal Commissioer of Income-tax
MANINDRA MOHAN SHRIVASTAVA and BHUWAN GOYAL, JJ.
D.B. Civil Writ Petition No. 5144 of 2022
FEBRUARY  26, 2024
Sanjay Jhanwar, Sr.Adv. and Aryan Singh for the Petitioner. Shantanu Sharma and Ms. Bhawna Laddha for the Respondent.
ORDER
1. A prayer for early listing has been made on the ground that the issue raised in this writ petition is now squarely covered by the decision of the Supreme Court in the case of Commissioner of Income Tax v. Industrial Development Bank of India Ltd. reported in (2023)  (SC).
2. The question which arise for consideration in the present case is whether the period of limitation for passing under Section 263 of the Income Tax Act, 1961 has to be reckoned from the date of original assessment order or from the date of reassessment order.
3. The Supreme Court in the aforesaid decision in the case of Commissioner of Income Tax(supra) has held as follows:-
“3. At the outset, it is required to be noted and it is not in dispute that, as such, the Commissioner exercised powers under Section 263 of the Act with respect to the issues which were not covered in the re-assessment proceedings. Therefore, the issues before the Commissioner while exercising the powers under Section 263 of the Act relate back to the original Assessment Order and, therefore, the limitation would start from the original Assessment Order and not from the Reassessment Order. We are fortified with our view by the decision of this Court in the case of Commissioner of Income Tax, Chennai v. Alagendran Finance Ltd. (2007) 7 SCC 215. As observed and held by this Court in the aforesaid decision, once an Order of Assessment is re-opened, the previous order of assessment will be held to be set aside and the whole proceedings would start afresh but the same would not mean that even when the subject matter of re-assessment is distinct and different, the entire proceedings of assessment would be deemed to have been re-opened. Meaning thereby, only in a case where the issues before the Commissioner at the time of exercising powers under Section 263 of the Act relate to the subject matter of re-assessment, the limitation would start from the date of Re-assessment Order. However, if the subject matter of the re-assessment is distinct and different, in that case the relevant date for the purpose of determination of period of limitation for exercising powers under Section 263 of the Act would be the date of the original Assessment Order.”
4. In view of the aforesaid authoritative pronouncement, it is clear that for the purposes of exercising powers under Section 263 of Income Tax Act, 1961, the period of limitation for passing the order has to be reckoned from the date of original assessment order and not from the date of reassessment order.
5. The aforesaid legal position is not disputed by learned counsel for the respondents.
6. In view of the above, the notice impugned cannot be sustained in law and, therefore, the same is set aside being without jurisdiction and barred by limitation.
7. The petition is accordingly allowed.