2012 (6) TMI 548 - AT - Income Tax

Period of limitation - Revisionary order passed u/s 263 on ground of erroneous deduction u/s 10B - order u/s 263 passed on 02.03.09 in respect of AY 97-98 of which assessment u/s 143(3) has been completed on 29.03.2000, which after litigation, reassessment and rectification proceedings attained finality on 04.05.2006 - Held that - CIT has revised the assessment order passed on 4-5-2006. It is to be seen that the matters pointed out by the CIT for the purpose of revising the assessment order have already reached finality in the order dated 29-3-2000 passed u/s 143(3) and in the order passed to give effect to the order of the CIT (Appeals) on 2-7-2002. The order of the CIT (Appeals) was dated 23-5-2002. Thereafter, the issues pointed out by the CIT were never raised in any of the proceedings. Therefore, as far as these issues are concerned, the relevant assessment order is the order passed on 29-3-2000. It is thereafter, on 24-11-2008, that the notice u/s 263 was issued and the order u/s 263 was passed on 2-3-2009. It is very clear that the revision order passed by the Commissioner of Income-tax is time barred - Decided against the Revenue.

Summary

Issues:
Revision order under section 263 of the Income-tax Act, 1961 being time-barred.

Analysis:
The appeal filed by the assessee was against the revision order passed by the Commissioner of Income-tax-I at Coimbatore under section 263 of the Income-tax Act, 1961. The Commissioner revised the assessment order for the assessment year 1997-98, contending that the exemption granted under section 10B(3) of the Act was erroneous and prejudicial to the Revenue's interests. The key reasons included eliminating certain income amounts for computation under sections 80HH and 10B, as well as deducting machinery replacement costs for the purpose of deduction under section 80HH. The assessee raised a ground against the revision order, arguing that it was time-barred. The chronological events leading to the revision order were detailed, emphasizing that the issues raised by the Commissioner had already been finalized in earlier orders, making the revision order time-barred.

The Hon'ble Supreme Court's decision in CIT vs. Alagendran Finance Ltd., 293 ITR 1, was cited to determine the period of limitation under section 263. The Court held that the period of limitation starts from the date of the original assessment order where the disputed issues were discussed, disregarding subsequent orders passed by lower authorities. In this case, it was established that the revision order by the Commissioner of Income tax was time-barred, rendering it void and unsustainable in law. Consequently, the revision order was set aside, and the appeal filed by the assessee was allowed.

In conclusion, the judgment highlighted the importance of adhering to the statutory limitation period for revision orders under section 263 of the Income-tax Act, ensuring that revisions are made within the prescribed timeframe from the original assessment order where the disputed issues were addressed. Failure to comply with the limitation period renders the revision order void and unsustainable, as exemplified in this case where the revision order was deemed time-barred and subsequently set aside.