9911796707
TMI Blog2002 (7) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... seen that section 263 of the Income-tax Act, provided a limitation of two years from the date of the passing of the order for revising that order under that section. The amendment which was made by section 47 of the Taxation Laws (Amendment) Act, 1984, provides now that the said limitation would stand extended and the limitation of the two years would start not from the date of the passing of the orders but from the last date of the relevant financial year. The amendment is to be found in the following words. The amended section 263(2) runs as under: "No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed." The emphasized words' would clearly suggest that even if the order which is sought to be revised under the section is passed earlier, the limitation of two years however would start from the end of the relevant financial year and in that sense the limitation would stand extended to that extent." The assessee in these cases had made a voluntary disclosure of Rs. 1,00,000 as representing the income for 1974-75 and earlier years, being the value of some items of steel and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciples of interpretation of statutes, stand extended in cases where the period of limitation originally laid down in that section had not expired before 1st October, 1984. However, with a view to avoiding controversy and litigation in the matter, it is desirable that orders under section 263 of the Income-tax Act are passed, as far as possible, within two years of the date of the order sought to be revised in cases where the order sought to be revised was passed before 1st October, 1984. (Sd.) Kalyan Chand, Under Secretary, Central Board of Direct Taxes. [F. No. 279/146/84-ITJ]" Learned counsel very fairly says that since the amendment made to section 263 is of procedural nature, ordinarily it would be retrospective in nature. Learned counsel however further carries his argument suggesting that because of the circular, which we have quoted above, the concerned authority was bound to exercise his powers within two years from the passing of the order. Learned counsel points out that in the circular the period considered is up to October 1, 1984, in the sense that in respect of those cases where the period of limitation had not expired before October 1, 1984, it would be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 119 are binding against the Department. As against this, learned senior standing counsel points out that factually the situation is not correct. He points out that it was not a Departmental practice to ignore the amendment and to take up the action of revision within two years of the orders if the limitation had not expired by October 1, 1984. Learned senior standing counsel has filed an affidavit of one M. L. Kuppusamy, the Commissioner of Income-tax-I Coimbatore. In that affidavit firstly it is suggested that the action initiated in this case more particularly in March, 1985, is well within time in terms of the amended section 263(2) of the Act. It is then asserted that it would not be correct to state that the circular is generally followed by the Departmental officer. The reason given is that in spite of the best efforts of the Department cases could arise where the action may not have been possible to be completed within the period of two years from the date of the assessment order sought to be revised and it is then asserted that in such cases the Department takes recourse to the amended provision of law. It is then submitted that the circular is followed wherever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affidavit made on behalf of the Department that it is not in all the cases that the circular is followed in the sense that the action for revision is ordered within two years of the passing of the orders to be revised. Therefore, there is a definite difference on the facts. Again it might have been the practice then to follow the circular but there is nothing on record that it is the practice even now or when the revision was initiated in this case. On the other hand, the practice seems to be otherwise. Therefore, even if a particular course was taken earlier it does not become binding on us. It is again not clear as to what is meant by "following the circular". If the circular is to be followed then also it cannot divest the revisional authority of his power and further if such power is used, such exercise cannot become illegal. Therefore, we would view the matter from the other angle, i.e., the language of the circular. A plain reading of the circular clearly shows that the Department was aware of the fact that because of the amendment to section 263(2) the limitation stood extended to the last date of the financial year and that such amendment being in the nature of procedur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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