Section 264 of the Income Tax Act: An Alternate Remedy for Taxpayers vis a vis Appeal

 

There is a provision in the Income Tax Act which allows the Principal Commissioner or Commissioner to revise an order passed by a subordinate authority. This provision can be invoked either on the taxpayer’s application or by the authority on its own motion, particularly when an appeal has not been filed or is not being pursued.

Here are key highlights of Section 264:

The revision can be requested within 1 year from the date the order was communicated to the assessee or the date on which it otherwise came to their knowledge.

The revised order cannot be prejudicial to the assessee.

No revision is permitted if the order is already under appeal or within the appealable timeframe (unless the right to appeal is waived)

A nominal fee of ₹500 is required for filing the revision application

Once filed, the order must be passed within 1 year from the end of the financial year in which the application is submitted

Section 264 is a discretionary yet equitable power, meant to address situations where a regular appeal may not be feasible, and to remedy genuine hardship caused by errors or oversight in tax proceedings.

Understanding and applying Section 264 wisely can assist in resolving certain disputes without resorting to prolonged litigation.