Income Tax 2025

Appearance

Revision of other orders. ​

378(1) ​

For any order, other than an order to which section 377 applies, passed by an authority subordinate to him, the Competent Authority may, either of his own motion or on an application by the assessee for revision,––

  • (a) call for the record of any proceeding under this Act in which any such order has been passed;
  • (b) make such inquiry or cause such inquiry to be made; and
  • (c) subject to the provisions of this Act, pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit.

378(2) ​

The Competent Authority shall not of his own motion revise any order under this section if the order has been made more than one year previously.

378(3) ​

In the case of an application for revision under this section by the assessee, the application shall be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier.

378(4) ​

The Competent Authority may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within the period as provided in sub-section (3), admit an application made after the expiry of the period specified in that sub-section.

378(5) ​

The Competent Authority shall not revise any order under this section in the following cases—

  • (a) where an appeal against the order lies to the Joint Commissioner (Appeals) or the Commissioner (Appeals) or to the Appellate Tribunal, but has not been made and the time within which such appeal may be made has not expired; or
  • (b) where the appeal lies to the Joint Commissioner (Appeals) or the Commissioner (Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal; or
  • (c) where the order has been made the subject of an appeal to the Joint Commissioner (Appeals) or the Commissioner (Appeals) or to the Appellate Tribunal.

378(6) ​

Every application by an assessee for revision under this section shall be accompanied by a fee of five hundred rupees.

378(7) ​

On every application by an assessee for revision under this section, an order shall be passed within one year from the end of the financial year in which such application is made.

378(8) ​

In computing the period of limitation under sub-section (7), the following period shall be excluded:—

  • (a) the time taken in giving an opportunity to the assessee to be reheard under section 244(2); and
  • (b) the period commencing on the date on which stay on any proceeding under this section has been granted by an order or injunction of any court and ending on the date on which certified copy of the order or injunction vacating the stay is received by the jurisdictional Principal Commissioner or Commissioner.

378(9) ​

If after the exclusion of the period provided in sub-section (8), the time limit for completion as provided in sub-section (6) is less than sixty days, such remaining period shall be extended to sixty days and such period of limitation shall be deemed to have been extended accordingly.

378(10) ​

Irrespective of anything contained in sub-section (7), an order in revision under that sub-section may be passed at any time in consequence of or to give effect to any finding or direction contained in an order of the Appellate Tribunal, the High Court or the Supreme Court.

378(11) ​

For the purposes of this section,––

  • (a) “Competent Authority” means the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner;
  • (b) an order by the Competent Authority declining to interfere shall, not be deemed to be an order prejudicial to the assessee.
Explanation

Section Summary: ​

Section 378 of the Income Tax Act allows a Competent Authority (Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner) to revise orders passed by subordinate authorities. This revision can be initiated either by the Competent Authority on their own motion or upon an application by the taxpayer (assessee). The purpose is to correct errors or address grievances without the need for formal appeals, provided certain conditions are met.

Key Changes: ​

  1. Time Limits for Revision:

    • The Competent Authority cannot revise an order on their own motion if the order is more than one year old (Section 378(2)).
    • Taxpayers must apply for revision within one year of becoming aware of the order (Section 378(3)).

  2. Exceptions to Revision:

    • Revision is not allowed if an appeal is pending or could still be filed (Section 378(5)).

  3. Fee for Application:

    • A fee of ₹500 must accompany the revision application (Section 378(6)).

  4. Timeline for Order:

    • The Competent Authority must pass an order within one year from the end of the financial year in which the application is made (Section 378(7)).

  5. Extended Time Limits:

    • If delays occur due to rehearing or court stays, the time limit is extended to ensure fairness (Section 378(8) and (9)).

  6. Effect of Higher Court Orders:

    • Revision orders can be passed at any time to align with findings or directions from the Appellate Tribunal, High Court, or Supreme Court (Section 378(10)).

Practical Implications: ​

  1. For Taxpayers:

    • Provides an alternative to filing an appeal, which can be time-consuming and costly.
    • Must act promptly, as the one-year deadline is strict unless sufficient cause for delay is proven.

  2. For Competent Authorities:

    • Ensures timely resolution of revision applications, with a one-year deadline for passing orders.
    • Must avoid revising orders that are already under appeal or could be appealed.

  3. For Businesses:

    • Offers a quicker way to resolve disputes or correct errors in tax orders.
    • Requires careful documentation and adherence to deadlines.

Critical Concepts: ​

  1. Competent Authority:

    • Refers to high-ranking tax officials (Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner) who have the power to revise orders.

  2. Prejudicial Order:

    • An order that harms the taxpayer’s interests. However, declining to interfere in a revision application is not considered prejudicial.

  3. Limitation Period:

    • The one-year time limit for filing a revision application starts from the date the taxpayer becomes aware of the order.

  4. Exclusion of Time:

    • Time taken for rehearing or court stays is excluded when calculating the one-year deadline for passing orders.

Compliance Steps: ​

  1. For Taxpayers:

    • File a revision application within one year of becoming aware of the order.
    • Pay the ₹500 fee along with the application.
    • Provide sufficient cause if filing after the one-year deadline.

  2. For Competent Authorities:

    • Ensure orders are passed within one year of the financial year in which the application is made.
    • Exclude time taken for rehearing or court stays when calculating deadlines.

Examples: ​

  1. Scenario 1:

    • A taxpayer receives an order on March 1, 2023, and realizes there is an error. They file a revision application on February 28, 2024 (within the one-year limit). The Competent Authority must pass an order by March 31, 2025 (one year from the end of FY 2023-24).

  2. Scenario 2:

    • A taxpayer misses the one-year deadline but proves they were hospitalized during the period. The Competent Authority may accept the application after the deadline due to sufficient cause.

  3. Scenario 3:

    • A taxpayer files a revision application, but the Competent Authority discovers the order is already under appeal. The revision application will be rejected, as revision is not allowed in such cases.

This section provides a streamlined process for correcting errors or addressing grievances, balancing the need for timely resolution with fairness to taxpayers.