The law allows the claim. You missed it in the return. The deadline to revise has passed. Can Section 264 still revive it when the delay is unexplained?
The Supreme Court, in Deputy Commissioner of Income Tax, CPC & Ors. vs M/s Om Siddhakala Associates, Civil Appeal No. 10175 of 2026 (order dated 05.08.2026), has held that Section 264 cannot be used to effectively revise a return after the time to revise it has lapsed.
What was the case about? (Simplified)
The assessee filed a self-assessment return; CPC processed it and raised a demand under Sections 143(1) and 156.
No claim on the tolerance limit was made in the return, and no revised return was filed within time.
A Section 264 revision was rejected by the PCIT on the ground of unexplained delay, holding that the Section 43CA tolerance limit was prospective and that Section 264 was being used to revise the return after the prescribed time. The Bombay High Court then remanded the matter for fresh consideration.
Key Findings of the Court (Relevant Paras Simplified)
No claim was made in the self-assessment return, nor was the return revised within the time prescribed (Para 5).
Allowing revision under Section 264 in such circumstances would revise the return “under the garb of a revision” (Para 5).
The Bombay High Court’s remand was set aside; the re-assessment made pursuant to it stands without effect (Para 6).
The Court left open whether the Section 43CA tolerance limit is retrospective or prospective (Para 7).
Important Learning
A strong case on merits cannot cure a missed limitation. Claims must be made in the return, or through a return revised in time. Section 264 is not a backdoor to revive what was never claimed, particularly where the delay is unexplained.
The copy of the order is as under:
