REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6204 OF 2021
The Commissioner of Income Tax, Chennai ..Appellant(S)
Versus
Mohammed Meeran Shahul Hameed ..Respondent(S)
J U D G M E N T
M. R. Shah, J.
1. Feeling aggrieved and dissatisfied with the impugned
judgment and order dated 03.07.2019 passed by the High
Court of Judicature at Madras in Tax Case Appeal No.429 of
2019, by which the High Court has dismissed the said appeal
preferred by the revenue and has confirmed the order dated
04.04.2013 passed by the learned Income Tax Appellate
Tribunal (hereinafter referred to as the learned ITAT) in ITA
No.2244/Mds/2012, the revenue has preferred the present
appeal.
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2. The facts leading to the present appeal in nutshell are as
under:
2.1 The Assessing Officer (hereinafter referred to as the AO)
passed an assessment order under Section 143 (3) of the
Income Tax Act (hereinafter referred to as the Act) for the
assessment year (AY) 200809 vide assessment order dated
30.12.2010. The Commissioner of Income Tax initiated
revision proceeding under Section 263 of the Act to revise the
assessment order passed by the learned Assessing Officer
and issued a notice to the assessee respondent herein on
01.02.2012. The assessee – respondent herein filed written
submissions on 07.03.2012 and 12.03.2012. That the
learned Commissioner passed an order under Section 263 of
the Act on 26.03.2012 holding that the Assessing Officer had
failed to make relevant and necessary enquiries and to make
correct assessment of income after due application of mind
and thus the assessment order made under Section 143 (3)
of the Act was held to be erroneous and prejudicial to the
interest of the revenue. The learned Commissioner set aside
the assessment order with a direction to Assessing Officer to
make necessary enquiries on the aspects mentioned in the
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order under Section 263. The order passed by the learned
Commissioner in exercise of powers under Section 263 of the
Act was challenged by the assessee – respondent herein
before the learned ITAT. At this stage, it is required to be
noted that the order passed under Section 263 of the Act was
dispatched by the office of the Commissioner on 28.03.2012.
2.2 The assessee – respondent herein filed an appeal before the
learned ITAT on 29.11.2012 submitting that it had come to
know about the revision order only when he received notice
dated 06.08.2012 under Section 143 (2) read with Section
263 of the Act from the office of the Assessing Officer.
Thereafter, the respondent had requested the Assessing
Officer to furnish the copy of the order passed by the learned
Commissioner which was supplied to him on 29.11.2012.
Before the learned ITAT, it was the case on behalf of the
assessee – respondent herein that the order passed by the
learned Commissioner was beyond the period of limitation
prescribed/mentioned under Section 263 (2) of the Act. Vide
order dated 04.04.2013 the learned ITAT accepted the
contention on behalf of the assessee – respondent herein and
allowed the appeal filed by the assessee by holding that the
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revision order passed by the learned Commissioner was
passed beyond the period of limitation.
2.3 Feeling aggrieved and dissatisfied with the order passed by
the learned ITAT quashing and setting aside the revisional
order passed by learned Commissioner under Section 263 of
the Act and holding that the order passed by the learned
Commissioner was beyond the period of limitation prescribed
under Section 263 (2) of the Act, the revenue – appellant
herein preferred appeal before the High Court, raising the
following substantial question of law:
"Whether, on the facts and in the
circumstances of the case, the case, the
Tribunal had applied its mind and was right
in holding that the revision order of the
Commissioner of Income Tax under section
263 dated 26.3.2012 revising the assessment
order dated 31.12.2010 is barred by
limitation provided under section 263(2) by
assuming that the last date for passing the
assessment order is 31.3.2012 and on the
ground that the order was served on
29.11.2012?"
2.4 By the impugned judgment and order, the High Court has
dismissed the said appeal and has confirmed the order
passed by learned ITAT holding that the order passed by the
learned Commissioner under Section 263 of the Act was
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barred by limitation. The High Court held that the date on
which the order was received by the assessee – respondent
herein is the relevant date for the purpose of determining the
period of limitation under Section 263 (2) of the Act.
2.5 Feeling aggrieved and dissatisfied with the impugned
judgment and order passed by the High Court, the revenue –
appellant herein has preferred the present appeal.
3. Shri Vikramjit Banerjee, learned Additional Solicitor General
(ASG) appearing on behalf of the revenue – appellant has
vehemently submitted that the High Court as well as the
learned ITAT both have misconstrued and misinterpreted the
provision of Section 263, more particularly subsection (2) of
Section 263 of the Act. It is submitted that the High Court
has erred in holding that the revision order dated 26.03.2012
passed by the Commissioner under Section 263 of the Act
was barred by period of limitation provided under Section
263 (2) of the Act.
3.1 It is submitted that the High Court has materially erred in
holding that the order passed under Section 263 is barred by
limitation provided under Section 263 (2) on the ground that
order under Section 263 was served on the assessee –
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respondent herein on 29.11.2012 which was after the expiry
of two years from the end of the financial year in which the
order was sought to be revised.
3.2 It is vehemently submitted by learned ASG that subsection
(2) of Section 263 of the Act provides that no order shall be
‘made’ under subsection (1) of Section 263 after the expiry
of two years from the end of the concerned financial year and
the relevant date in the present case to pass the order under
Section 263 would be 31.03.2012. It is submitted that in the
present case the order in fact was passed on 26.03.2012 and
in fact dispatched on 28.03.2012. It is submitted that
therefore the order passed by the learned Commissioner
under Section 263 was within the period of limitation
prescribed under Section 263 (2) of the Act.
3.3 Shri R. Sivaraman, learned Advocate appearing on behalf of
the respondent – assessee relying upon para 15 of the
counter affidavit has submitted that as such the order
passed by the learned Commissioner under Section 263 of
the Act has been acted upon before it was set aside by
learned ITAT and thereafter a fresh assessment order has
been passed by the Assessing Officer. It is submitted that
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therefore as such the issue involved in the present appeal
has become academic.
4. We have heard the learned counsel appearing on behalf of
the respective parties at length. Though it is the case on
behalf of the respondent – assessee that by now the issue
involved in the present appeal has become academic,
considering the fact that the question of law raised in the
present appeal is the pure question of law and therefore we
are inclined to decide the said question of law.
4.1 The short question of law which is posed for consideration
before this court is, whether in the facts and circumstances
of the case, the High Court and the learned ITAT are right in
holding that the order passed by the learned Commissioner
passed under Section 263 was barred by period of limitation
provided under Section 263 (2) of the Act? 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?
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4.2 While deciding the aforesaid issues and question of law,
Section 263 (2) of the Income Tax Act, which is relevant for
our consideration is required to be referred to, which reads
as under:
“(2) No order shall be made under subsection (1)
after the expiry of two years from the end of the
financial year in which the order sought to be
revised was passed.”
4.3 On a fair reading of subsection (2) of Section 263 it can be
seen that as mandated by subsection (2) of Section 263 no
order under Section 263 of the Act shall be “made” after the
expiry of two years from the end of the financial year in
which the order sought to be revised was passed. Therefore
the word used is “made” and not the order “received” by
the assessee. Even the word “dispatch” is not mentioned in
Section 263 (2). Therefore, once it is established that the
order under Section 263 was made/passed within the period
of two years from the end of the financial year in which the
order sought to be revised was passed, such an order cannot
be said to be beyond the period of limitation prescribed under
Section 263 (2) of the Act. Receipt of the order passed under
Section 263 by the assessee has no relevance for the purpose
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of counting the period of limitation provided under Section
263 of the Income Tax Act. In the present case, the order was
made/passed by the learned Commissioner on 26.03.2012
and according to the department it was dispatched on
28.03.2012. 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 200809 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.
However as observed hereinabove, the 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. As observed
hereinabove, the word used is “made” and not the “receipt
of the order”. As per the cardinal principle of law the
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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.
5. In view of the above and for the reasons stated above the
question of law framed is answered in favour of the revenue –
appellant and against the assessee – respondent herein and
it is held that the order passed by the learned Commissioner
under Section 263 of the Income Tax Act was within the
period of limitation prescribed under subsection (2) of
Section 263 of the Act. The present appeal is allowed
accordingly. No costs.
…………………………………J.
(M. R. SHAH)
…………………………………J.
(A. S. BOPANNA)
New Delhi,
October 07, 2021.
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