COMMISSIONER OF INCOME TAX, CHENNAI vs. MOHAMMED MEERAN SHAHUL HAMEED

CIVIL APPEAL No. 6204/2021Supreme Court[2021] 8 S.C.R. 75807 October 2021Bench: 2 JudgesAuthor: M.R. SHAH, A.S. BOPANNA SUPREME COURT REPORTS7 pages
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What did the Supreme Court hold?

The Supreme Court held that the High Court and ITAT had misconstrued and misinterpreted Section 263(2) of the Income Tax Act, 1961. The Court emphasized that the language of Section 263(2) clearly states that no order 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. The word "made" is crucial, and the date of "receipt" by the assessee, or even "dispatch", is not relevant for calculating the period of limitation. The Court reasoned that adhering to the High Court's interpretation would mean adding words to the statute that are not present. Since the Commissioner's order was passed on 26.03.2012, which was within the two-year period ending 31.03.2012 (the end of the financial year in which the assessment order for AY 2008-09 was passed), it was within the period of limitation. The appeal was allowed, and the question of law was answered in favour of the revenue.

What were the facts?

The Revenue (Commissioner of Income Tax, Chennai) is in appeal against the High Court's order which upheld the ITAT's decision. The Assessing Officer (AO) passed an assessment order under Section 143(3) for AY 2008-09 on 30.12.2010. The Commissioner initiated revision proceedings under Section 263, issuing a notice on 01.02.2012. The assessee filed submissions on 07.03.2012 and 12.03.2012. The Commissioner passed the revision order on 26.03.2012, holding the AO's assessment erroneous and prejudicial to revenue, and set aside the assessment order. This order was dispatched on 28.03.2012. The assessee claimed to have received notice of the revision order only on 06.08.2012 and obtained a copy on 29.11.2012. The ITAT and High Court held the revision order barred by limitation under Section 263(2) because it was received by the assessee after the prescribed period.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal and High Court were right in holding that the revision order of the Commissioner of Income Tax under Section 263 dated 26.03.2012, revising the assessment order dated 31.12.2010, is barred by limitation provided under Section 263(2) of the Income Tax Act, 1961, by assuming that the last date for passing the order was 31.03.2012 and on the ground that the order was served on the assessee on 29.11.2012? Assessee's Contention: The revision order passed by the Commissioner was beyond the period of limitation prescribed under Section 263(2) of the Act, as it was received by the assessee on 29.11.2012, which was after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. The issue has become academic as the order was acted upon and a fresh assessment order was passed. Revenue's Contention: The High Court and ITAT misconstrued and misinterpreted Section 263(2). The provision states that no order shall be 'made' after the expiry of two years from the end of the financial year. The order was passed on 26.03.2012 and dispatched on 28.03.2012, which is within the period of limitation. The date of receipt by the assessee is irrelevant for calculating the limitation period.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 143(2)

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A B C D E F G H 758 SUPREME COURT REPORTS [2021] 8 S.C.R. [2021] 8 S.C.R. 758 758 THE COMMISSIONER OF INCOME TAX, CHENNAI v. MOHAMMED MEERAN SHAHUL HAMEED (Civil Appeal No.6204 of 2021) OCTOBER 07, 2021 [M.R. SHAH AND A.S. BOPANNA, JJ.] Income Tax Act, 1961 – s.263 – Revision order passed under – When not barred by period of limitation provided u/s.263(2) – Held: Once it is established that the order u/s.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 is not beyond the period of limitation prescribed u/s.263(2) – Receipt of the order passed u/s. 263 by the assessee has no relevance for the purpose of calculating the period of limitation provided u/ s.263(2) – On facts, order passed by Commissioner u/s.263 was within the period of limitation prescribed u/s.263(2) – Interpretation of Statutes.

Allowing the appeal, the Court HELD: 1.1 On a fair reading of sub-section (2) of Section 263, Income Tax Act, 1961 as mandated by sub-section (2) of Section 263 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

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