Section 263 - Revision of orders prejudicial to revenue - Income-tax Act, 1961

E.-Revision by the 12 [Principal Commissioner or] Commissioner Revision of orders prejudicial to revenue. 263. (1) The 12 [Principal Commissioner 16 [ Principal Chief Commissioner or Chief Commissioner or Principal Commissioner ] or] Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the 1 [Assessing] Officer 17 [ or the Transfer Pricing Officer, as the case may be, ] is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, 18 [ 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. ] . 2 [ Explanation 13 [ 1 ].-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- ( a ) an order passed 3 [on or before or after the 1st day of June, 1988] by the Assessing Officer 17 [ or the Transfer Pricing Officer, as the case may be, ] shall include- ( i ) an order of assessment made by the Assistant Commissioner 4 [or Deputy Commissioner] or the Income-tax Officer on the basis of the directions issued by the 5 [Joint] Commissioner under section 144A; ( ii ) an order made by the 6 [Joint] Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer 17 [ or the Transfer Pricing Officer, as the case may be, ] conferred on, or assigned to, him under the orders or directions issued by the Board or by the 12 [Principal Chief Commissioner or] Chief Commissioner or 12 [Principal Director General or] Director General or 12 [Principal Commissioner or] Commissioner authorised by the Board in this behalf under section 120; 19 [ (iii) an order under section 92CA by the Transfer Pricing Officer; ] ( b ) record 7 [shall include and shall be deemed always to have included] all records relating to any proceeding under this Act available at the time of examination by the 12 [Principal 15 [ Chief Commissioner or Chief Commissioner or Principal ] Commissioner or] Commissioner; ( c ) where any order referred to in this sub-section and passed by the Assessing Officer 17 [ or the Transfer Pricing Officer, as the case may be, ] had been the subject matter of any appeal 8 [filed on or before or after the 1st day of June, 1988], the powers of the 12 [Principal Commissioner or] Commissioner under this sub-section shall extend 9 [and shall be deemed always to have extended] to such matters as had not been considered and decided in such appeal.] 14 [ Explanation 2 .-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer 17 [ or the Transfer Pricing Officer, as the case may be, ] shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal 15 [ Chief Commissioner or Chief Commissioner or Principal ] Commissioner or Commissioner,- (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. ] 20 [ 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. ] 10 [(2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.] (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, 11 [*******] the High Court or the Supreme Court. Explanation .-In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. --------------- Notes :- 1. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 2. Substituted by the Finance Act, 1988, w.e.f. 1-6-1988. Prior to its substitution, Explanation was inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984 and amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3. Inserted by the Finance Act, 1989, w.r.e.f. 1-6-1988. 4. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. 5. Substituted for Deputy by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. 6. Substituted for Deputy by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. 7. Substituted for includes by the Finance Act, 1989, w.r.e.f. 1-6-1988. 8. Inserted by the Finance Act, 1989, w.r.e.f. 1-6-1988. 9. Inserted by the Finance Act, 1989, w.r.e.f. 1-6-1988. 10. Substituted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. 11. Originally, proposed to be inserted by the National Tax Tribunal Act, 2005 from the date to be notified, but since withdrawn. 12. Inserted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of June, 2013. 13. Explanation shall be numbered as Explanation 1 vide THE FINANCE ACT, 2015 w.e.f. 1st day of June, 2015 14. Inserted vide THE FINANCE ACT, 2015 w.e.f. 1st day of June, 2015 15. Inserted vide THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 dated 29-09-2020 w.e.f. 01-11-2020 16. Inserted vide THE FINANCE ACT, 2021 dated 28-03-2021 w.e.f. 01-11-2020 17. Inserted vide Finance Act, 2022 w.e.f. 01-04-2022 18. Substituted vide Finance Act, 2022 w.e.f. 01-04-2022 before it was read as including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment 19. Inserted vide Finance Act, 2022 w.e.f. 01-04-2022 20. Inserted vide Finance Act, 2022 w.e.f. 01-04-2022