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Tribunal rules in favor of assessee, quashes time-barred revisionary order under section 263 The Tribunal allowed the appeal of the assessee, quashing the revisionary order passed under section 263 as time-barred. The Tribunal held that the ...
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Tribunal rules in favor of assessee, quashes time-barred revisionary order under section 263
The Tribunal allowed the appeal of the assessee, quashing the revisionary order passed under section 263 as time-barred. The Tribunal held that the revisionary proceedings exceeded the time limit set by section 263(2) of the Act, as the issue subject to revision was not part of the re-assessment proceedings. The order was pronounced on 01.09.2021, with the Tribunal finding in favor of the assessee based on the limitation issue, making other grounds raised irrelevant.
Issues: 1. Jurisdiction of the ld PCIT to pass order u/s 263 of the Act on the ground that the proceedings are time-barred.
Detailed Analysis:
Issue 1: Jurisdiction of the ld PCIT to pass order u/s 263 of the Act on the ground that the proceedings are time-barred: The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) relevant to the assessment year 2010-11. The assessment was re-opened by the AO beyond four years to verify transactions carried out by the assessee company with specific parties. The ld PCIT initiated revisionary proceedings under section 263 of the Act based on the AO's letter stating that the issue of share capital raised by the assessee could not be verified due to a shortage of time. The assessee challenged the revisionary order on the grounds of being time-barred, arguing that the period of limitation should be reckoned from the original assessment order and not from the re-assessment order. The ld AR contended that the revisionary proceedings and order were invalid as they exceeded the time limit set by section 263(2) of the Act. The ld DR, however, argued that the period should be calculated from the re-assessment order. The Tribunal examined the facts, noting that the issue subject to revision was not part of the re-assessment proceedings, and no additions were made during the reassessment. Citing the decision in CIT Vs. Alagendran Finance Ltd., the Tribunal held that the revisionary order was time-barred and, therefore, null and void. Consequently, the revisionary proceedings and the order passed under section 263 were quashed.
In conclusion, the Tribunal allowed the appeal of the assessee based on the limitation issue, rendering the other grounds raised moot. The order was pronounced in the open court on 01.09.2021.
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