CIT v Mohammed Meeran Shahul Hameed [2021] 131 taxmann.com 94 (SC), [TS-940-SC-2021] – SC holds that date on which revision order was ‘made’ by CIT is relevant for determining the limitation u/s 263(2) and not the date of its receipt by the Assessee.
Section 263(2) – “(2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.”
Facts of the Case
An assessment order was passed u/s 143(3) for AY 2008-09 on 30.12.2010.
The CIT revised the Order u/s 263 on 26.03.2012 holding that assessment order is erroneous and prejudicial to the interest of the Revenue.
The Order was dispatched on Mar 28, 2012
The Order was served upon the Assessee on 29.11.2012.
The ITAT accepted Assessee’s contention that the order u/s 263 was barred by limitation for being passed beyond the time prescribed u/s 263(2). The Madras HC dismissed Revenue’s appeal.
Decision of Supreme Court
The SC allowed revenue appeal. The SC held that on a fair reading of Section 263(2), it can be seen that as mandated of section is that 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 cannot be said to be beyond the period of limitation prescribed under Section 263 (2) of the Act. The SC held that 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.
Comments
The statute uses different words like “received”, “passed”, “served” or “made” in different sections to prescribe the limitation period. Therefore, while interpreting the limitation period due weightage should be given to the meaning of these different words used in the sections.