Jigar M. Patel
International Tax Attorney
Section 264 of the Income-tax Act is an equitable or beneficial provision which can provide meaningful relief to a taxpayer in situations where he may otherwise be deprived of adequate remedy.
Powers of Revision in the Interest of Taxpayer
Under section 264, an Income-tax Commissioner is empowered to exercise powers of revision in the interest of the taxpayer. In the exercise of this power, the Commissioner may either of his own motion or on an application by the taxpayer, call for the record of any income tax proceeding and pass such order thereon, not being an order prejudicial to the taxpayer.
The revisionary power by the Commissioner is to be exercised within limitation of one year, either in case of a suo motu action or at the instance of the taxpayer, with the added discretion to condone delay in a case where he is satisfied that the taxpayer was prevented by sufficient cause from preferring an application within the prescribed period.
Liberal Judicial Interpretations explaining the scope of Revision
While the Commissioner enjoys discretion to grant or refuse relief under the revisionary powers, it has been held in a series of judicial pronouncements that such discretion is to be exercised judiciously and not arbitrarily according to his own fancy.
Infact, it is now a judicially settled position that while exercising his powers under Section 264, a Commissioner should entertain even a new ground, claim or relief not urged by a taxpayer before the lower authority, but which is raised for the first time in a petition for revision.
In a recent case before the Hon’ble Gujarat High Court, the taxpayer had through oversight missed out on claiming long-term capital loss in the income-tax return filed by him. The revision petition filed by the taxpayer was rejected by the Commissioner on the ground that an intimation u/s. 143(1) had already been issued and therefore, the taxpayer cannot be given a second chance to make a claim which he had failed to raise at the time of filing his tax return.
Rejecting the contention of the revenue, the High Court held that where a taxpayer is entitled to a relief, the Commissioner is duty bound to consider the same on the merits of the case, regardless of the fact that such a situation has arisen on account of the taxpayer’s mistake or oversight.
Revision cannot be simultaneously entertained with an Appeal
Under Section 264, a taxpayer cannot opt for filing a revision petition in a case where an appeal has been filed against the order sought to be revised. However, in such a case, the taxpayer may first consider to withdraw the appeal filed and thereafter prefer the application under Section 264.
When Revision can prove to a Blessing?
While a taxpayer would be well advised to seek remedy in respect of contentious issues through the appellate route, preferring a revision petition before the Commissioner seeking appropriate relief can indeed prove to be a blessing, particularly in cases where though entitled under law, he has either missed, through oversight or committed mistakes in claiming such reliefs in proceedings before the lower authorities.
The time limit for disposal of revision petitions under Section 264 has been fixed as one year from the end of the financial year in which such petition has been filed by the taxpayer. It needs to be borne in mind that the order of the Commissioner under Section 264 cannot be questioned in appeal. However, a taxpayer in suitable cases may challenge such order in a writ before the High Court.
