IMPORTANT POINT
The limitation period for invoking Section 263 of the Income Tax Act, 1961, is determined from the date of the original assessment order when the issues are distinct from those in the reassessment order.

ORDER :

1. This writ petition has been preferred under Article 226 of the Constitution of India claiming the following reliefs:

"It is therefore, most respectfully prayed that the writ petition of the Petitioner may kindly be allowed and by an appropriate writ, order or direction, the Hon’ble Court may further be pleased to:-

A. Declare that the impugned proceedings under Section 263 of the Income Tax Act, 1961 by Respondent has become time barred and therefore continuation of same is non-est and void ab initio and accordingly Issue writ in the nature of Certiorari, or any other appropriate writ, order or direction to quash the Notice dated 09.01.2024 (Annexure-6) issued by Respondent fixing 16.01.2024 as the date of hearing of case on merits including consequential order passed, if any during the pendency of the writ petition.

B. Any other appropriate order or direction, which this Hon'ble Court considers just and proper in the facts and circumstances of this case, may kindly be passed in favour of the Petitioner.

C. Allow the Writ Petition with costs;

D. Any other order/direction, which Hon'ble court deems appropriate.”

2. Brief facts of the case, as placed before this Court by Mr. Sanjay Jhanwar, learned Senior Counsel assisted by Mr. Prakul Khurana appearing for the petitioner-firm, are that the petitioner filed his income tax return on 24.09.2013 declaring a total income of Rs.4,98,43,110/-. In the said income tax return, the petitioner has also reflected a Dividend income of Rs.21,58,735/- received from investment in Mutual Funds of UTI Ltd. and tax paid on the short term capital gain. Upon the scrutiny of the petitioner’s income tax return, a notice was issued by the respondents and the assessment under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act of 1961’) was done by the concerned authority, while passing a detailed assessment order dated 08.01.2016. A notice was issued to the petitioner under Section 154 of the Act of 1961 on 18.10.2016 proposing to rectify the said assessment order dated 08.01.2016 pertaining to the earned Dividend income and expenditure under Section 14A of the Act of 1961 read with, Rule 8D of the Income Tax (Fifth Amendment) Rules, 2008. The petitioner duly submitted its reply, upon which the respondents did not rectify the assessment order, while retaining original position thereof.

3. Thereafter, the petitioner was issued a re-assessment notice under Section 147 of the Act of 1961 on the ground that there was a short fall of an amount of Rs.2,32,330/- in job charges account, during the F.Y. 2012-13 and relevant A.Y 2013-14. Accordingly, the reassessment order was passed on 25.03.2022.

4. The present controversy has arisen because the respondents have issued another notice for the hearing dated 09.01.2024 to the petitioner under Section 263 of the Act of 1961 invoking the revisional jurisdiction relating to the rate of tax on the facts observed in the said notice.

5. Learned Senior Counsel for the petitioner has drawn the attention of this Court towards the judgment rendered by the Hon’ble Apex Court in the case of Commissioner of Income Tax Vs. Industrial Development Bank of India Ltd., reported in (2023) 152 taxman.com 591 (SC) whereby in paragraph No.2, the question of law has been framed, which has been answered in paragraph No.3 of the said judgment. The said paras 2 & 3 read as under:

"2. The following question of law arises for consideration of this Court in the present appeal

“i) whether in the facts and circumstance of the case and in law, the period of limitation for passing order under Section 263 of the Income Tax Act, 1961 has to be reckoned from the date of the original assessment order or from the date of the reassessment order?”

3. At the outset, it is required to be noted and it is not in dispute that as such, the Commissioner exercised powers under Section 263 of the Act with respect to the issues which were not covered in the re-assessment proceedings. T