Revision under Section 264 cannot be invoked to amend a return after the statutory time limit expires.

By | August 18, 2026
0 Comment
Revision under Section 264 cannot be invoked to amend a return after the statutory time limit expires.

Issue

Whether a taxpayer who failed to claim a statutory deduction/tolerance limit under Section 43CA in their original return, and did not file a revised return within the prescribed statutory period, can seek to amend their income/tax liability by filing a revision application under Section 264 against an intimation issued under Section 143(1).

Facts

  • Return & Processing: The assessee filed a return of income on self-assessment without claiming the benefit of the tolerance limit available under Section 43CA.
  • Intimation & Demand: The Centralised Processing Centre (CPC) processed the return as filed and issued an intimation under Section 143(1) along with a notice of demand under Section 156.
  • Failure to Revise Return: The assessee did not file a revised return of income within the time limit prescribed under the Income-tax Act, 1961.
  • Revision Application under Section 264: The assessee subsequently approached the Principal Commissioner of Income Tax (PCIT) under Section 264 seeking revision of the intimation to claim the Section 43CA benefit.
  • Rejection by PCIT: The PCIT rejected the Section 264 application citing unexplained delay, the prospectivity of Section 43CA tolerance limits, and holding that the assessee was attempting to circumvent the statutory deadline for revising a return under the garb of a revision petition.
  • High Court Intervention: The assessee filed a writ petition before the High Court, which set aside the PCIT’s order and remanded the matter back for fresh consideration, leading to a reassessment.
  • Appeal to Higher Forum: The Revenue challenged the High Court’s order of remanding the matter when the assessee had never claimed the relief in their return or via a timely revised return.

Decision

  • In Favor of Revenue: The Supreme Court/Appellate Court ruled in favor of the Income Tax Department, setting aside the judgment of the High Court.
  • Error in Remand: The High Court fell in error by remanding the matter, as the issue of the tolerance limit was neither raised in the original return nor claimed through a timely revised return.
  • Section 264 Cannot Bypass Statutory Timelines: A revision application under Section 264 cannot be used as an indirect route to alter or revise a return of income after the statutory window for filing a revised return under the Act has expired.
  • Nullification of Reassessment: As a consequence of setting aside the High Court order, any reassessment made pursuant to the High Court’s remand was rendered non-applicable and invalid.
  • Taxability on Original Return: The assessee remains liable to pay tax based on the original self-assessment return processed under Section 143(1) and the resultant demand notice under Section 156.

Key Takeaways

  • No Revision for Omitted Claims: Relief or statutory benefits not claimed in the original return cannot be introduced through Section 264 if the statutory period for filing a revised return has lapsed.
  • Limits of Section 264: Revisionary powers under Section 264 are intended to correct errors in orders passed by lower authorities, not to provide an avenue for taxpayers to bypass time-barred return revisions.
  • Binding Nature of Self-Assessment: Taxpayers are bound by their self-assessed income unless corrected within the strict procedural frameworks and timelines established under the Income-tax Act.
SUPREME COURT OF INDIA
Deputy Commissioner of Income-tax, CPC
v.
Om Siddhakala Associates*
J.B. PARDIWALA and K. Vinod Chandran, JJ.
CIVIL APPEAL NO. 10175 OF 2026†
AUGUST  5, 2026
Venkataraman Chandrashekhara Bharathi, Udai Khanna, Padmesh Mishra, Mukesh Kumar Verma, Advs. and Sudarshan Lamba, AOR for the Petitioner. Rajat Mittal, AOR, Sanket S Bora, Ms. Vidhi K Punmiya and Subham Kumar, Advs. for the Respondent.
ORDER
1. Delay condoned. Leave granted.
2. The appeal is from an order in the Writ Petition, which remanded the matter to be considered afresh.
3. We heard learned Standing Counsel appearing for the Department and learned Counsel for the respondent. While learned Counsel for the Department submits that the demand raised was in accordance with the returns filed. Without filing a revised return, the demand was challenged under Section 264 of the Income Tax Act, 19611, which when dismissed, the respondent-assessee had approached the High Court. The claim raised could not have been made especially, since there was no revision of returns filed by the assessee. The learned Counsel for the assessee on the other hand submits that the impugned order is a mere remand made and all contentions could be raised before the appropriate authority.
4. We are not convinced that the remand, in the facts and circumstances of the case, was permissible. Admittedly, on selfassessment, a return was filed by the assessee which was processed by the Centralised Processing Centre, Income Tax Department, Bengaluru and a notice was issued under Section 143(1) and a subsequent notice under Section 156, demanding the outstanding tax as coming out from the returns filed on self-assessment. The respondent filed a revision invoking Section 264 of the Act before the Principal Commissioner of Income Tax, who rejected the same on the ground that there was unexplained delay, the tolerance limits as coming out from Section 43CA were only prospective and that by side-wind the attempt is to revise the return, after the period had expired, by invoking Section 264.
5. The issue of tolerance limit was not raised in the selfassessment nor was the assessment revised within the time provided. The High Court, hence, fell in error, insofar as the remand made. The assessee having not claimed the same in the returns filed could have revised the return within the time provided under the Act. When that was not done, there is no question of revision under Section 264, which would be an attempt to revise the return under the garb of a revision.
6. Learned Counsel for the respondent-assessee submits that there has been re-assessment made after remand. Necessarily, if the remand order is set aside, the order passed on re-assessment will also have no effect, being a dependent order. We hence set aside the impugned judgment of the High Court and as a consequence any re-assessment made would not be applicable. The assessee would have to pay tax on the basis of the returns filed on which an intimation was issued and a demand raised.
7. The appeal is allowed to that extent clearly observing that we have not entered into the question of whether the tolerance limit would be retrospective or prospective.
8. Pending application(s), if any, shall also stand disposed of.