Section 264 of the Income Tax Act: A Comprehensive Guide on Revision of Other Orders

The Indian Income Tax Act, 1961, is vast & filled with several provisions that aim to ensure justice & fairness in taxation. Among these is Section 264 of the Income Tax Act, a crucial section that deals with the Revision of other orders passed by tax authorities. This provision offers taxpayers an opportunity to seek relief when they believe that an order passed by the Assessing Officer (AO) is unjust, erroneous, or requires reconsideration. In this blog, we will explain what Section 264 of the Income Tax Act is, its application process, time limits, & other vital details in a natural, easy-to-understand way.

What is Section 264 of the Income Tax Act?

Section 264 of the Income Tax Act 1961 empowers the Principal Commissioner or Commissioner of Income Tax to revise any order passed by the Assessing Officer (AO), either on the taxpayer’s application or suo moto (on their motion). This section provides taxpayers with a last chance to appeal or seek revision of other orders when no other remedy is available.

Many times, taxpayers receive an order from the Assessing Officer that they believe is incorrect. In such cases, instead of moving directly to expensive litigation, they can apply for revision under Section 264 of the Income Tax Act.

When Can Section 264 Be Invoked?

A taxpayer can invoke Section 264 of the Income Tax Act when:

• They are aggrieved by any order passed by the Assessing Officer.
• There is no other appeal pending before the Commissioner of Income Tax (Appeals) or Income Tax Appellate Tribunal (ITAT).
• The taxpayer seeks a fair reconsideration of their case.

It’s important to note that the Commissioner can also initiate proceedings under this section on their own, even without the taxpayer filing an application.

Time Limit for Filing Application under Section 264 of the Income Tax Act

One of the most searched queries is the Section 264 of the Income Tax Act time limit. Taxpayers must apply for revision within one year from the date of the order sought to be revised. However, the Commissioner has the authority to condone delays if a valid reason is provided.

Thus, if you have received an unfavourable assessment order & wish to contest it under this section, make sure to adhere to the time limit specified under Section 264 of the Income Tax Act."

Powers of the Commissioner under Section 264

The Principal Commissioner or Commissioner has broad powers under Section 264 of the Income Tax Act. They can:

• Cancel or set aside the order of assessment of the Assessing Officer.
• Direct a fresh assessment or modifications to the existing assessment.
• Provide relief to the assessee by interpreting the provisions of the Act in a manner beneficial to the taxpayer.

However, the Commissioner cannot pass any order that is prejudicial to the interests of the assessee without allowing them to be heard.

Key Benefits of Section 264 of the Income Tax Act

1. Taxpayer-Friendly: This section gives taxpayers an additional platform to challenge any unfair assessment.
2. Cost-Effective: Compared to litigation, filing a revision application under Section 264 is economical.
3. Quick Redressal: In many cases, revisions can be resolved faster than appeals.
4. Avoids Lengthy Court Proceedings: Taxpayers can resolve disputes without going to the Income Tax Appellate Tribunal or the courts.

Common Scenarios for Applying Section 264

• When deductions were wrongly disallowed.
• When refunds were denied without proper reasoning.
• When incorrect income was assessed.
• When taxpayers missed claiming eligible exemptions.

In such situations, applying for a revision under Section 264 of the Income Tax Act of India can save time, money, & unnecessary legal battles."

How to Apply under Section 264?

The process to apply for revision under Section 264 of the Income Tax Act is simple:

1. Draft an application explaining the grounds of revision clearly.
2. Attach all supporting documents.
3. Apply to the Jurisdictional Commissioner of Income Tax.
4. Wait for the Commissioner's order, which could be in your favour.

Final Words: Let Callmyca Simplify Tax Troubles for You

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