High Court Of Madras
N. Mahalingam vs. CIT
Sections 119, 263
Asst. Year 1979-80, 1980-81, 1981-82
R. Jayasimha Babu & Mrs. A. Subbulakshmy, JJ.
Tax Case Nos. 680 to 682 of 1988
25th September, 2001
Counsel Appeared
P.P.S. Janardhanaraja, for the Assessee : Mrs. Chitra Venkataraman, for the Revenue
JUDGMENT
R. JAYASIMHA BABU, J. :
The assssment years are 1979-80, 1980-81 and 1981-82. The assessee’s grievance, which resulted in thereference is regarding the revision of the assessment order, which had been passed on 25th Jan., 1983. The revisional order had been passed on 25th March, 1985. The assessee contends that the revisional order is one, which should not have been made having regard to the circular, which the CBDT had issued on the 1st Nov., 1984. That circular reads thus : “Circular No. 402, dt. 1st Nov.,1984. Subject: Taxation Laws (Amendment) Act, 1984—Amendment of s. 263 of the IT Act, 1961— Clarification regarding. As a consequence of the amendment of s. 263 of the IT Act, 1961, by s. 47 of the Taxation Laws (Amendment) Act, 1984, the limitation for passing an order under s. 263 will, in view of general principles of interpretation of statutes, stand extended in cases where the period of limitation originally laid down in that section had not expired before 1st Oct., 1984. However, with a view to avoiding controversy and litigation in the matter, it is desirable that orders under s. 263 of the IT 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 Oct., 1984” [(1985) 44 CTR (TLT) 1].
The learned senior standing counsel for the Department has informed us that the Department has consistently followed the circular. No reason has been stated as to why that circular was disregarded in the instant case. The assessee herein is as much entitled to the benefit of the circular as any other assessee similarly placed. That circular being one which is beneficial to the assessee, is also binding on the Department and the stand taken by the Department inconsistent with the circular cannot be sustained. The question referred to us regarding the illegality of the revision made by the CIT in exercise of his power under s. 263 of the IT Act, revising the assessment, which had been made on 25th Jan., 1983, prior to the date of amendment of s. 263 by the Taxation Laws (Amendment) Act, 1984, is, therefore, answered against the Revenue and in favour of the assessee.
[Citation : 256 ITR 453]
