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2023 (7) TMI 1259 - AT - Income TaxRevision u/s 263 - Period of limitation of two years - HELD THAT - When the claim of interest on income tax was not a subject matter of subsequent order passed by the Ld. AO u/s 143(3) r.w.s. 263 of the Act then the limitation period of two years as prescribed under subsection (2) of section 263 of the Act would reckon from the date of the first assessment and not from the second assessment. Accordingly, we are of the considered view that the impugned revision order passed by the ld. Pr. CIT dated 24.02.2021 is beyond the period of limitation of two years provided under sub-section (2) of section 263 of the Act and consequently, the impugned order is not sustainable in law and liable to be quashed. Decided in favour of assessee.
Issues Involved:
1. Non-disposal of objections and adjournment request by the Ld. Pr. CIT. 2. Validity of the order u/s 263 being barred by limitation. 3. Revision of an order passed u/s 143(3) r.w.s. 263. Summary: Issue 1: Non-disposal of objections and adjournment request by the Ld. Pr. CIT The assessee contended that the Ld. Pr. CIT erred by passing the order u/s 263 without disposing of the objections to the show cause notice filed on 13.02.2021 and the request for adjournment of personal hearing filed on 22.02.2021. Issue 2: Validity of the order u/s 263 being barred by limitation The assessee challenged the validity of the impugned order passed u/s 263 on the grounds of limitation, arguing that the order was passed after more than two years from the date of the original order u/s 147 r.w.s. 143(3) dated 03.03.2016. The Ld. AR referenced the judgment of the Hon'ble Supreme Court in CIT vs. M/s. Alagendran Finance Ltd. 293 ITR 1, asserting that the limitation period should begin from the date of the original order, not from the order passed pursuant to the first revision order. The Tribunal agreed, noting that the second revision order dated 24.02.2021 was beyond the period of limitation, as it was passed after two years from the end of the financial year in which the original reassessment order was passed. Issue 3: Revision of an order passed u/s 143(3) r.w.s. 263 The Tribunal examined the sequence of orders and found that the first revision order dated 15.03.2017 addressed the issue of a cash loan of Rs. 1,15,00,000/- and interest thereon, which was not considered by the Ld. AO in the reassessment order dated 03.03.2016. The second revision order dated 24.02.2021, however, dealt with the issue of interest on income tax, which was not a subject matter of the first revision order or the subsequent order passed by the Ld. AO on 31st July 2017. The Tribunal concluded that the limitation period for passing the revision order should be reckoned from the date of the original reassessment order, making the second revision order barred by limitation. Conclusion: The Tribunal quashed the impugned revision order dated 24.02.2021 as it was beyond the period of limitation prescribed under sub-section (2) of section 263 of the Act. Consequently, the other grounds raised by the assessee were deemed infructuous. The appeal of the assessee was allowed.
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