Receipt of the order passed under Section 263 I T Act by the assessee has no relevance for the purpose of counting the period of limitation - SC

The AO passed an assessment order under Section 143 (3) of the Income Tax Act for the assessment year (AY) 2008­09 vide assessment order dated 30.12.2010. The Commissioner of Income Tax initiated revision proceeding under Section 263 of the Act to revise the assessment order passed by the learned Assessing Officer and passed an order under Section 263 of the Act on 26.03.2012 holding that the Assessing Officer had failed to make relevant and necessary enquiries and to make correct assessment of income after due application of mind and thus the assessment order made under Section 143 (3) of the Act was held to be erroneous and prejudicial to the interest of the revenue. The learned Commissioner set aside the assessment order with a direction to Assessing Officer to make necessary enquiries on the aspects mentioned in the order under Section 263. The order passed by the learned Commissioner in exercise of powers under Section 263 of the Act was challenged by the assessee – respondent in which it was held that the revision order passed was beyond the limitation period and the Madras High Court in its impugned judgement upheld the order passed by the ITAT. Aggrieved by the Judgement appellant approached the Apex court. Primary question of law for the consideration as: whether the relevant date for the purpose of considering the period of limitation under S.263(2) of the IT Act would be the date on which the order is actually received by the assessee? 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 - word used is “made” and not the order “received” by the assessee - once 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. 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. Held that the order passed by the learned Commissioner under Section 263 of the Income Tax Act was within the period of limitation prescribed under sub­section (2) of Section 263 of the Act. Appeal is allowed. 

October 07, 2021

The Commissioner of Income Tax, Chennai  Versus Mohammed Meeran Shahul Hameed