JUDGEMENT
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(1.)PER Shri A.V.Balasubramanyam, JM - These appeals are directed against the consolidated order passed by the Commissioner of Income-tax, under section 263, Income-tax Act, in respect of assessments passed for 1980-81 and 1981-82.
(2.)The original assessments, for the two years mentioned above, had been made on 23-2-1983 and 26-2-1983 respectively. The Commissioner viewed that they were erroneous and prejudicial to the interests of the revenue. For the present the details in this regard may not be necessary. On 7-3-1985, the Commissioner issued notice to the assessee calling upon it to lodge objections, if any, for his proposal to revise the assessments in regard to certain items stated in the notice and this was obviously to provide an opportunity of being heard as required in sub-section (1) of section 263. The assessee gave a reply in writing on 19-3-1985 in support of its stand that interference under section 263 was not called for. The Commissioner finally passed a consolidated order on 26-3-1985 whereby he set aside the assessments and gave directions to the Income-tax Officer as to the manner in which assessments are to be completed. The assessee is in appeal challenging the same.
Shri R. Krishnamoorthy, the learned counsel for the assessee, raised a preliminary objection which touches upon limitation. It is his case that the Commissioner has not jurisdiction on 26-3-1985 to pass the impugned order inasmuch as it was beyond the period of limitation specified in the section as it obtained on the date the assessments were made. The argument for the revenue has been that the Commissioner was competent in view of the amendment made to section 263(2) which had come into force before the period allowed under the earlier provision had elapsed.
(3.)SECTION 263(2), as it stood on the date of assessments, prohibited the Commissioner from revising an order after the expiry of two years from the date of the order sought to be revised, namely, the order of assessment. This provision was amended by Taxation Laws (Amendment) Act, 1984 and with effect from 1-10-1984 there was a change in limitation. As per the amended provision, the Commissioner would have no power to revise after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. The period of two years stands but the change is of the starting point of limitation. While according to the provision as it stood on the date of assessment, limitation had to be reckoned from the date of the assessment whereas under the amended provision it starts from the end of the financial year in which the assessments are passed. It is in this sense there is an enlargement of the period within which the Commissioner can exercise powers under section 263(1).
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