No Revision u/s 263 if barred by limitation Period : HC

S.N. Dutta, Adv. and Asok Bhowmick, Adv. for the Appellant. J.P. Khaitan , Sr. Adv. and Indranil Nandi, Adv. for the Respondent.

ORDER

1. The Court : Heard both sides.

2. This appeal was admitted by this Court by an order dated 22^nd January, 2019, on the following substantial questions of law:—

3. After considering the submissions of the parties and on perusal of records, facts emerge as hereunder :

That in course of the assessment proceedings for the assessment year 2007-08 on 28th October, 2009 the Assessing Officer had made an enquiry with regard to deduction of Rs. 1,20,30,048/- claimed under the head “Accountants Risk Policy Premium” calling upon the assessee to explain the claim and file details/evidence whether tax deduction at source was applicable and the assessee gave the details and explained the said premium and on 31st December, 2009 the Assessing Officer passed order under section 143(3) of the Income-tax Act, 1961, allowing the said claim. The assessee went into appeal against that order under section 143(3), on the other issues, before the Commissioner of Income-tax (Appeals), who had granted partial relief to the assessee by his order dated 4th February, 2011. Both the assessee and the revenue preferred appeal before the Learned Income-tax Appellate Tribunal against the aforesaid order of the Commissioner of Income-tax (Appeals) which was disposed of by its order dated 4th March, 2011 by upholding the appellate order on all the issues except PWC Global Service Charges. On 7th March, 2011 the Assessing Officer passed the order giving effect to the order of the CIT(Appeals) and on 23rd March, 2015 the Assessing Officer gave effect to the order of the Tribunal giving effect to the same on the issue of allowability of PWC Global Service Charges. On 10th April, 2018 the assessee filed an application under section 154 of the Income-tax Act, 1961 for rectification of the order of the CIT(Appeals) on some issues and the Learned Tribunal upheld the order of the CIT(Appeals). Thereafter, the Assessing Officer passed an order under section 154 of the Income-tax Act on 13th April, 2015. On 27th March, 2017 the CIT(Appeals) passed an order under section 263 by setting aside the order dated 23rd March, 2015 passed by the Assessing Officer, read with his order dated 13th April, 2015 and directed to pass a fresh order after enquiry in respect of allowability of Accountants Risk Policy Premium amounting to Rs. 1,20,30,048/-. The assessee challenged the said order passed under section 263 before the Learned Tribunal and the Learned Tribunal allowed the assessee’s appeal by passing the impugned order dated 22nd September, 2017. Relevant portion of the order of the Learned Tribunal, at paragraph 11 of the order of the Tribunal is recorded hereunder :-

“We have also seen that order dated 23.03.2015 passed by the AO giving effect to the directions of the tribunal dated 04.03.2014 (passed u/s 254 r.w.s 143(3) of the Act) did not deal with the issue of allowability of premium on account of Accountants Risk Policy. The show cause notice u/s 263 of the Act purports to revise the order dated 27.02.2017 and subsequent order dated 13.04.2015 passed u/s 254 r.w.s143(3) of the Act and in these orders the AO did not deal with the premium paid on account of Accountants Risk Policy nor was it subject matter of those proceedings. The CIT realizing that the issue of premium paid on Accountants Risk Policy which was allowed as deduction in order dated 31.12.2009 cannot be revised u/s 263 of the Act because of the time limit laid down u/s 263(2) of the Act, has in the garb of seeking to revise the order dated 23.03.2015 sought to question the allowability of premium paid on account of Accountants Risk Policy. This was clearly beyond the scope of the order dated 23.03.2015. In other words, the action u/s 263 of the Act in so far as the premium paid was barred by limitation as laid down u/s 263(2) of the Act. We therefore quash the order u/s 263 of the Act on the ground of limitation. We may also add that even on merits we are of the view that the premium paid in question cannot be considered as one falling within the ambit of Explanation 1 to section 37 of the Act. Since we have decided the issue on the point of limitation we do not wish to elaborate on this aspect further. For the reasons given above we quash the order u/s 263 of the Act and allow the appeal of the assessee.”

4. Considering the submissions of the parties and the aforesaid facts as appears from record and the reasoning given by the Learned Tribunal allowing the appeal of the assessee, we are not inclined to interfere with the order of the Learned Tribunal since we are in complete agreement with the view taken by the Learned Tribunal as quoted above.

5. We answer question no.3 in the affirmative and against the revenue and in favour of the assessee and in view of answering this question, question nos.1 and 2 do not survive.

6. ITA No. 7 of 2019 is, accordingly, dismissed.

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