In a Relief to Jindal Steel and Power, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) has quashed a revisional assessment passed under section 263 of the Income Tax Act, 1961, for the reason that the same is passed beyond two years of the conclusion of the original assessment.
The original assessment against the assessee was later re-opened by the department. Thereafter, PCIT examined the records and revised the same under section 263 of the income tax act on 26/2/2019 finding that the assessment was erroneous and prejudicial to the interest of revenue in the light of the report of Justice M B Shah commission of inquiry, on illegal mining of Iron Ore manganese dated June 13.
On appeal, the assessee contended before the authorities that the revision of the proceedings is barred by limitation having regard to the time limit prescribed under section 263 of the act. It was also stated that the revision order if at all, should be confined only to the issues arising out of the reassessment order dated 16/1/2014 and not beyond that. It was further stated that since the assessment order dated 30/12/2016 was neither „erroneous not prejudicial to the interest of the revenue.
Accepting the above contentions, the Tribunal held that “the limitation should also start from the original assessment. In this case, as original assessment order u/s 143(3) of the act was passed on16.01.2014, the revision thereof could have been taken up to 31.3.2016. Impugned order u/s 263 of that was passed on 26/2/2019, therefore it is clearly beyond the limitation prescribed u/s 263 (2) of the act. Thus the impugned order is barred by limitation and hence quashed.”
Subscribe Taxscan Premium to view the Judgment
