Income Tax Revision by Authorities under section 263 at the behest of AO

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The Tax Publishers Income Tax--Revision Under Section 263 Revision by Authorities Under Section 263 at The Behest of AO--Whether valid ? Sameer Bhatia The learned author in his write-up has examined the provisions of section 263 of the Income Tax Act, 1961 qua Explanation 2 appended thereto with effect from 01st June, 2015. He also contends that any action purportedly taken in consequence of the Explanation 2 appended to section 263 will be applicable from the Assessment Year 2015-16 onwards and not prior to that. He has authoritatively observed that even a proposal under consideration from the assessing officer seconded by Joint Commissioner by itself is not sufficient to arm the department to venture into proceedings under section 263 as no assessment can be framed at the diktats of high authorities. 1. Prologue Income Tax Act, 1961 receives over a considerable number of amendments every year besides major changes introduced in the annual budgets by taking into consideration primarily the judicial precedents responsible for such changes. Section 263 of the Income Tax Act, 1961 confers wide powers on the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to step into the assessment(s) finalized by the assessing officers nowadays in the faceless regime popularly designated at the Faceless Assessing Officer (FAO) with the intent to vouch the very credibility, authenticity and legality of the assessments framed. However in the course of such exercise, the officers designated flex their powers to such an extent which at all does not commensurate with the actions underlined as per the provisions of section 263 which entails a consequent action from assessee to challenge the same before the final fact finding authority i.e. ITAT. 2. Exercise of powers at the behest of an assessing officer Section 263 of the Income Tax Act, 1961 provides that the authorities designated may call for and examine the record of any proceedings under this Act. The expressions 'may call for', 'examine the record' and 'any proceedings' as they appear in the provision do not appear to have been so widely stretched when pitted against the actions of the department in taking recourse to section 263. It is well settled that a law which is capable of conferring jurisdiction on the officers in due execution of the obligations vested in them on the basis of discretion is also capable of being arbitrarily used when the written submission, judicial precedents, circulars, notifications etc. issued by the Central Board of Direct Taxes in favour of the assessee(s) are distinguished, varied, contradicted and discredited on one pretext or the other by the authorities conferred with such power. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Revision Under Section 263

Revision by Authorities Under Section 263 at The Behest of AO--Whether valid ?

Sameer Bhatia

The learned author in his write-up has examined the provisions of section 263 of the Income Tax Act, 1961 qua Explanation 2 appended thereto with effect from 01st June, 2015. He also contends that any action purportedly taken in consequence of the Explanation 2 appended to section 263 will be applicable from the Assessment Year 2015-16 onwards and not prior to that. He has authoritatively observed that even a proposal under consideration from the assessing officer seconded by Joint Commissioner by itself is not sufficient to arm the department to venture into proceedings under section 263 as no assessment can be framed at the diktats of high authorities.

1. Prologue

Income Tax Act, 1961 receives over a considerable number of amendments every year besides major changes introduced in the annual budgets by taking into consideration primarily the judicial precedents responsible for such changes. Section 263 of the Income Tax Act, 1961 confers wide powers on the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to step into the assessment(s) finalized by the assessing officers nowadays in the faceless regime popularly designated at the Faceless Assessing Officer (FAO) with the intent to vouch the very credibility, authenticity and legality of the assessments framed. However in the course of such exercise, the officers designated flex their powers to such an extent which at all does not commensurate with the actions underlined as per the provisions of section 263 which entails a consequent action from assessee to challenge the same before the final fact finding authority i.e. ITAT.

2. Exercise of powers at the behest of an assessing officer

Section 263 of the Income Tax Act, 1961 provides that the authorities designated may call for and examine the record of any proceedings under this Act. The expressions 'may call for', 'examine the record' and 'any proceedings' as they appear in the provision do not appear to have been so widely stretched when pitted against the actions of the department in taking recourse to section 263. It is well settled that a law which is capable of conferring jurisdiction on the officers in due execution of the obligations vested in them on the basis of discretion is also capable of being arbitrarily used when the written submission, judicial precedents, circulars, notifications etc. issued by the Central Board of Direct Taxes in favour of the assessee(s) are distinguished, varied, contradicted and discredited on one pretext or the other by the authorities conferred with such power.