COMMISSIONER OF INCOME TAX, CHENNAI versus MOHAMMED MEERAN SHAHUL HAMEED on 7 October 2021

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 03.07.2019 passed by the High Court of Judicature at A

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AMadras in Tax Case Appeal No.429 of 2019, by which the High Courthas dismissed the said appeal preferred by the revenue and has confirmedthe order dated 04.04.2013 passed by the learned Income Tax AppellateTribunal (hereinafter referred to as the learned ITAT) in ITA No.2244/Mds/2012, the revenue has preferred the present appeal.

B2. The facts leading to the present appeal in nutshell are as under:- 2.1 The Assessing Officer (hereinafter referred to as the AO)passed an assessment order under Section 143 (3) of the Income TaxAct (hereinafter referred to as the Act) for the assessment year (AY)2008-09 vide assessment order dated 30.12.2010. The Commissioner ofCIncome Tax initiated revision proceeding under Section 263 of the Act torevise the assessment order passed by the learned Assessing Officerand issued a notice to the assessee - respondent herein on 01.02.2012.The assessee – respondent herein filed written submissions on 07.03.2012and 12.03.2012. That the learned Commissioner passed an order underSection 263 of the Act on 26.03.2012 holding that the Assessing OfficerDhad failed to make relevant and necessary enquiries and to make correctassessment of income after due application of mind and thus theassessment order made under Section 143 (3) of the Act was held to beerroneous and prejudicial to the interest of the revenue. The learnedCommissioner set aside the assessment order with a direction to AssessingEOfficer to make necessary enquiries on the aspects mentioned in theorder under Section 263. The order passed by the learned Commissionerin exercise of powers under Section 263 of the Act was challenged bythe assessee – respondent herein before the learned ITAT. At this stage,it is required to be noted that the order passed under Section 263 of theAct was dispatched by the office of the Commissioner on 28.03.2012.F

2.2 The assessee – respondent herein filed an appeal before thelearned ITAT on 29.11.2012 submitting that it had come to know aboutthe revision order only when he received notice dated 06.08.2012 underSection 143 (2) read with Section 263 of the Act from the office of theAssessing Officer. Thereafter, the respondent had requested theGAssessing Officer to furnish the copy of the order passed by the learnedCommissioner which was supplied to him on 29.11.2012. Before thelearned ITAT, it was the case on behalf of the assessee – respondentherein that the order passed by the learned Commissioner was beyondthe period of limitation prescribed/mentioned under Section 263 (2) ofHthe Act. Vide order dated 04.04.2013 the learned ITAT accepted the contention on behalf of the assessee – respondent herein and allowedthe appeal filed by the assessee by holding that the revision order passedby the learned Commissioner was passed beyond the period of limitation.

2.3 Feeling aggrieved and dissatisfied with the order passed bythe learned ITAT quashing and setting aside the revisional order passedby learned Commissioner under Section 263 of the Act and holding thatthe order passed by the learned Commissioner was beyond the period oflimitation prescribed under Section 263 (2) of the Act, the revenue –appellant herein preferred appeal before the High Court, raising thefollowing substantial question of law:-

“Whether, on the facts and in the circumstances of the case, thecase, the Tribunal had applied its mind and was right in holdingthat the revision order of the Commissioner of Income Tax undersection 263 dated 26.3.2012 revising the assessment order dated31.12.2010 is barred by limitation provided under section 263(2)by assuming that the last date for passing the assessment order is31.3.2012 and on the ground that the order was served on29.11.2012?”

2.4 By the impugned judgment and order, the High Court hasdismissed the said appeal and has confirmed the order passed by learnedITAT holding that the order passed by the learned Commissioner underSection 263 of the Act was barred by limitation. The High Court heldthat the date on which the order was received by the assessee –respondent herein is the relevant date for the purpose of determining theperiod of limitation under Section 263 (2) of the Act.

2.5 Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court, the revenue – appellant herein haspreferred the present appeal.

3. Shri Vikramjit Banerjee, learned Additional Solicitor General(ASG) appearing on behalf of the revenue – appellant has vehementlysubmitted that the High Court as well as the learned ITAT both havemisconstrued and misinterpreted the provision of Section 263, moreparticularly sub-section (2) of Section 263 of the Act. It is submitted thatthe High Court has erred in holding that the revision order dated 26.03.2012passed by the Commissioner under Section 263 of the Act was barredby period of limitation provided under Section 263 (2) of the Act.

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A3.1 It is submitted that the High Court has materially erred inholding that the order passed under Section 263 is barred by limitationprovided under Section 263 (2) on the ground that order under Section263 was served on the assessee – respondent herein on 29.11.2012which was after the expiry of two years from the end of the financialyear in which the order was sought to be revised.B

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3.2 It is vehemently submitted by learned ASG that sub-section(2) of Section 263 of the Act provides that no order shall be ‘made’under sub-section (1) of Section 263 after the expiry of two years fromthe end of the concerned financial year and the relevant date in thepresent case to pass the order under Section 263 would be 31.03.2012.CIt is submitted that in the present case the order in fact was passed on26.03.2012 and in fact dispatched on 28.03.2012. It is submitted thattherefore the order passed by the learned Commissioner under Section263 was within the period of limitation prescribed under Section 263 (2)of the Act.D

3.3 Shri R. Sivaraman, learned Advocate appearing on behalf ofthe respondent – assessee relying upon para 15 of the counter affidavithas submitted that as such the order passed by the learned Commissionerunder Section 263 of the Act has been acted upon before it was setaside by learned ITAT and thereafter a fresh assessment order has beenEpassed by the Assessing Officer. It is submitted that therefore as suchthe issue involved in the present appeal has become academic.

4. We have heard the learned counsel appearing on behalf of therespective parties at length. Though it is the case on behalf of therespondent – assessee that by now the issue involved in the presentFappeal has become academic, considering the fact that the question oflaw raised in the present appeal is the pure question of law and thereforewe are inclined to decide the said question of law.

4.1 The short question of law which is posed for considerationbefore this court is, whether in the facts and circumstances of the case,Gthe High Court and the learned ITAT are right in holding that the orderpassed by the learned Commissioner passed under Section 263 wasbarred by period of limitation provided under Section 263 (2) of the Act?Whether the High Court is right in holding that the relevant date for thepurpose of considering the period of limitation under Section 263(2) ofthe IT Act would be the date on which the order passed under SectionH263 by the learned Commissioner is received by the assessee?

4.2 While deciding the aforesaid issues and question of law, Section263 (2) of the Income Tax Act, which is relevant for our consideration isrequired to be referred to, which reads as under:- “(2) No order shall be made under sub-section (1) after the expiryof two years from the end of the financial year in which the ordersought to be revised was passed.”

4.3 On a fair reading of sub-section (2) of Section 263 it can beseen that as mandated by sub-section (2) of Section 263 no order underSection 263 of the Act shall be “made” after the expiry of two yearsfrom the end of the financial year in which the order sought to be revisedwas passed. Therefore the word used is “made” and not the order“received” by the assessee. Even the word “dispatch” is not mentionedin Section 263 (2). Therefore, once it is established that the order underSection 263 was made/passed within the period of two years from theend of the financial year in which the order sought to be revised waspassed, such an order cannot be said to be beyond the period of limitationprescribed under Section 263 (2) of the Act. Receipt of the order passedunder Section 263 by the assessee has no relevance for the purpose ofcounting the period of limitation provided under Section 263 of the IncomeTax Act. In the present case, the order was made/passed by the learnedCommissioner on 26.03.2012 and according to the department it wasdispatched on 28.03.2012. The relevant last date for the purpose of passingthe order under Section 263 considering the fact that the assessmentwas for the financial year 2008-09 would be 31.03.2012 and the ordermight have been received as per the case of the assessee – respondentherein on 29.11.2012. However as observed hereinabove, the date onwhich the order under Section 263 has been received by the assessee isnot relevant for the purpose of calculating/considering the period oflimitation provided under Section 263 (2) of the Act. Therefore the HighCourt as such has misconstrued and has misinterpreted the provision ofsub-section (2) of Section 263 of the Act. If the interpretation made bythe High Court and the learned ITAT is accepted in that case it will beviolating the provision of Section 263 (2) of the Act and to add somethingwhich is not there in the section. As observed hereinabove, the wordused is “made” and not the “receipt of the order”. As per the cardinalprinciple of law the provision of the statue/act is to be read as it is andnothing is to be added or taken away from the provision of the statue.Therefore, the High Court has erred in holding that the order under A

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ASection 263 of the Act passed by the learned Commissioner was barredby period of limitation, as provided under sub-section (2) of Section 263of the Act.

In view of the above and for the reasons stated above the questionof law framed is answered in favour of the revenue – appellant andBagainst the assessee – respondent herein and it is held that the orderpassed by the learned Commissioner under Section 263 of the IncomeTax Act was within the period of limitation prescribed under sub-section(2) of Section 263 of the Act. The present appeal is allowed accordingly.No costs.

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Divya Pandey

Appeal allowed.

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