2021 (10) TMI 363 - SC - Income Tax

Supreme Court clarifies time limit calculation under Income Tax Act

The Commissioner of Income Tax, Chennai Versus Mohammed Meeran Shahul Hameed

The Supreme Court interpreted Section 263 (2) of the Income Tax Act, emphasizing that the crucial factor for calculating the limitation period is when the ... Revision u/s 263 by CIT - limit limit to pass the order - whether order barred by limitation? - Order 'Made' versus Order 'Served' - whether the High Court is right in holding that the relevant date for the purpose of considering the period of limitation under Section 263(2) of the IT Act would be the date on which the order passed under Section 263 by the learned Commissioner is received by the assessee? - HELD THAT:- The relevant last date for the purpose of passing the order under Section 263 considering the fact that the assessment was for the financial year 2008-09 would be 31.03.2012 and the order might have been received as per the case of the assessee – respondent herein on 29.11.2012 - date on which the order under Section 263 has been received by the assessee is not relevant for the purpose of calculating/considering the period of limitation provided under Section 263 (2) of the Act. Therefore the High Court as such has misconstrued and has misinterpreted the provision of subsection (2) of Section 263 of the Act. If the interpretation made by the High Court and the learned ITAT is accepted in that case it will be violating the provision of Section 263 (2) of the Act and to add something which is not there in the section - word used is “made” and not the “receipt of the order”. As per the cardinal principle of law the provision of the statue/act is to be read as it is and nothing 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 Section 263 of the Act passed by the learned Commissioner was barred by period of limitation, as provided under subsection (2) of Section 263 of the Act. Question of law framed is answered in favour of the revenue – appellant and against the assessee. Issues:1. Interpretation of Section 263 (2) of the Income Tax Act regarding the limitation period for passing revision orders.2. Relevance of the date of receipt of the order by the assessee in determining the period of limitation under Section 263 (2).Analysis:Issue 1: Interpretation of Section 263 (2) of the Income Tax ActThe case involved a revision proceeding initiated by the Commissioner of Income Tax under Section 263 of the Income Tax Act for the assessment year 2008-09. The Commissioner set aside the assessment order passed by the Assessing Officer, directing further inquiries. The order under Section 263 was challenged before the Income Tax Appellate Tribunal (ITAT), which held that the revision order was passed beyond the period of limitation. The High Court upheld the ITAT's decision, stating that the relevant date for calculating the limitation period under Section 263 (2) is the date the order is received by the assessee. However, the Supreme Court interpreted Section 263 (2) to emphasize that the word used is 'made' and not 'received.' The Court clarified that the crucial factor is when the order was made or passed, not when it was received by the assessee. Therefore, the Court held that the order passed by the Commissioner under Section 263 was within the prescribed period of limitation.Issue 2: Relevance of the Date of Receipt in Determining Limitation PeriodThe appellant argued that the High Court and the ITAT misinterpreted Section 263 (2) by considering the date of receipt of the order by the assessee as crucial in determining the limitation period. The appellant contended that the date of making or passing the order is the determining factor for the limitation period, not the date of receipt. The Court agreed with the appellant's interpretation, emphasizing that the statute must be read as it is without adding or subtracting from its provisions. Therefore, the Court held that the High Court erred in considering the date of receipt of the order as relevant for calculating the limitation period under Section 263 (2). The Court ruled in favor of the appellant, holding that the order passed by the Commissioner under Section 263 was within the prescribed period of limitation.In conclusion, the Supreme Court allowed the appeal, stating that the order passed under Section 263 of the Income Tax Act was within the period of limitation prescribed under Section 263 (2). The Court emphasized that the date of making the order, not the date of receipt by the assessee, is crucial in determining the limitation period.