Tribunal allows appeal due to untimely revisionary order under section 263.

The Tribunal allowed the appeal, finding the revisionary order not passed within the prescribed time limit under section 263. The decision was based on the jurisdictional issue, and as a result, other grounds of appeal were not addressed. The Tribunal's ruling was in favor of the assessee, and the appeal was allowed on 4th August 2017.

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Issues Involved:
Challenging order u/s.263 of the Act regarding unsecured loans treated as deemed dividend under section 2(22)(e) - Jurisdictional issue of time limit for passing revisionary order u/s.263.

Analysis:
1. The assessee, engaged in trading, filed its return declaring income, later assessed u/s. 143(3) r.w.s.147 at a higher income. PCIT found unsecured loans from a company with substantial shareholding by the assessee, invoking section 2(22)(e) as deemed dividend. PCIT issued a notice for revisionary proceedings as AO had not examined the issue.

2. The CIT, after submissions by the assessee, held the provisions of section 2(22)(e) applicable, directing the AO to examine the issue of deemed dividend not addressed in the assessment order. The CIT determined non-business related transactions as loans/advances, emphasizing the applicability of section 2(22)(e).

3. During the hearing, the AR argued the order was not erroneous or prejudicial, citing cases. The DR contended the revisionary order was within the time limit. The issue of whether the transaction was a loan/deposit or mutual/current account was debated.

4. The Tribunal analyzed the jurisdictional issue of time limit for passing revisionary orders u/s.263. Citing the Lark Chemicals Ltd. case, it emphasized that the CIT's exercise of jurisdiction was time-barred, as the issues were beyond the two-year limit from the intimation u/s.143(1). The Tribunal allowed the appeal, holding the revisionary order invalid due to exceeding the time limit.

In conclusion, the Tribunal allowed the appeal, finding the revisionary order not passed within the prescribed time limit under section 263. The decision was based on the jurisdictional issue, and as a result, other grounds of appeal were not addressed. The Tribunal's ruling was in favor of the assessee, and the appeal was allowed on 4th August 2017.

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