Summary
The Court held that limitation under Section 263(2) of the Income Tax Act turns on when the Commissioner makes the revisional order, rather than when the assessee receives it. The provision bars making an order after two years from the end of the financial year in which the order sought to be revised was passed. As the revisional order was made within the applicable period, later receipt did not render it time-barred. The revenue’s appeal was allowed on that question of law.
Issues
- Whether receipt by the assessee, rather than making of the revisional order, determines compliance with Section 263(2).
- Whether the revisional order was barred merely because the assessee received it after the asserted deadline.
Provisions considered
- Section 263(2), Income Tax Act, 1961The prescribed limit concerns making the revisional order within two years from the end of the financial year in which the order being revised was passed; receipt by the assessee does not determine that limit. (¶¶ 4.2, 4.3)
Held
- Section 263(2) uses the making of the order as the relevant event. It does not specify receipt or dispatch. Once timely making is established, later receipt by the assessee cannot make the order time-barred under that provision. Reading a receipt requirement into the text would add words absent from the statute. (¶¶ 4.2, 4.3)
- The Commissioner’s order was made on 26 March 2012 and held within the applicable limitation period. The Tribunal and High Court erred in treating the assessee’s later receipt as decisive. The question was answered for the revenue; the judgment resolved that limitation issue rather than assessing the substantive correctness of the tax revision. (¶¶ 2.1, 2.2, 2.4, 4.1, 4.3)
- Although the assessee submitted that subsequent assessment developments rendered the issue academic, the Court decided it because it presented a pure question of law. (¶¶ 3.3, 4)
Result
Revenue’s appeal allowed; question of law answered in its favour and the Commissioner’s revisional order held within Section 263(2) limitation. No costs.