Amendment of section 263.
72. In section 263 of the Income-tax Act, in sub-section (1),–
(a) after the words “Assessing Officer” wherever they occur, the words “or the Transfer Pricing Officer, as the case may be,” shall be inserted;
(b) for the words “including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment”, the following shall be substituted, namely:––
“including,––
(i) an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment; or
(ii) an order modifying the order under section 92CA; or
(iii) an order cancelling the order under section 92CA and directing a fresh order under the said section.”;
(c) in Explanation 1, in clause (a), after sub-clause (ii), the following sub-clause shall be inserted, namely:––
“(iii) an order under section 92CA by the Transfer Pricing Officer;”;
(d) after Explanation 2, the following Explanation shall be inserted, namely:––
‘Explanation 3.––For the purposes of this section, “Transfer Pricing Officer” shall have the same meaning as assigned to it in the Explanation to section 92CA.’.
Notes on Clauses:
Clause 72 seeks to amend section 263 of the Income-tax Act relating to revision of orders prejudicial to revenue.
Sub-section (1) in the said section provides that the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceedings under the Act, and if he considers that any order passed by the Assessing Officer under the Act is erroneous in so far as it is prejudicial to the interests of revenue, he may pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment, after making or causing to be made any such inquiry as he deems necessary.
It is proposed to provide that in addition to the existing provision, the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceedings under the Act, and if he considers that any order passed by the Transfer Pricing Officer under the Act is erroneous in so far as it is prejudicial to the interests of revenue, he may pass such order thereon as the circumstances of the case justify, including an order modifying the order under section 92CA or cancelling the order under section 92CA and directing a fresh order under section 92CA, after making or causing to be made any such inquiry as he deems necessary. Such order shall be passed only after giving the assessee an opportunity of being heard.
It is further proposed to amend clause (a) of Explanation 1 to the said sub-section also to include an order under section 92CA by the Transfer Pricing Officer for the purposes of the said section.
It is also proposed that the clause (c) of the Explanation 1 to the sub-section (1) of the said section shall provide that where any order referred to in the said sub-section and passed by the Assessing Officer or the Transfer Pricing Officer, as the case may be, had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Principal Commissioner or Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal.
It is also proposed to amend the Explanation 2 to the sub-section (1) to make it applicable to an order passed by the Transfer Pricing Officer also.
It is also proposed to insert Explanation 3 in the sub-section (1) of the said section to define the expression “Transfer Pricing Officer”.
These amendments will take effect from lst April, 2022.
