Section 263 in search cases, the appeal, and section 377 of the 2025 Act

This is Part 3 of a three-Part series on revision under section 263 of the Income-tax Act, 1961 and section 377 of the Income-tax Act, 2025. This Part covers revision of search assessments and of orders passed with a superior’s approval, the defence that the assessment was itself void, the Transfer Pricing Officer’s order, who revises and the provisions for faceless revision, the appeal to the Tribunal and the fresh assessment, the comparison with section 264, and section 377 with the transition. Part 1 covers the twin test, inquiry and Explanation 2; Part 2 covers the record, merger, limitation, the notice and the form of the order.

A search assessment is completed in a Central Circle, usually close to the limitation date, with the approval of the Range head. A year or more later a notice arrives from the Principal Commissioner (Central). It says that the Assessing Officer accepted the returned income, or made a small addition, without inquiring into a seized document, a set of unsecured loans or a cash payment, and that the order is erroneous in so far as it is prejudicial to the interests of the revenue.

The assessee’s first reaction is usually that the order cannot be touched, because a superior officer approved it before it was passed. That argument has succeeded on section 153D before one High Court and several Tribunal Benches and failed before others, and the Finance Act, 2026 has changed the ground under it. The second reaction is to look at the assessment itself: if it was made without jurisdiction, can that be said now, in answer to the Department’s own revision?

Whatever the answer to the notice, the order that follows is appealable to the Tribunal, the Assessing Officer will meanwhile start the fresh assessment, and for an order relating to a tax year before 2026-27 (a block assessment under the 2025 Act apart) all of this continues under the 1961 Act although that Act has been repealed.

Key points

• An assessment made after a search with approval under section 153D is an order “passed therein by the Assessing Officer” and, in our view, is within section 263: the Supreme Court held on 16 January 2003 that orders passed on a superior’s directions under section 144A or the former section 144B are not excluded, and the Gujarat High Court applied that on 2 April 2003. This is a view, not settled law; we have not seen a decision of the Supreme Court or the Gujarat High Court on section 153D itself.
• The contrary view, that the approval bars revision or must first be found erroneous, rests on a Madhya Pradesh High Court order of 1 April 2024 made at admission with no one appearing for the assessee, a Madras High Court decision of 11 September 2012 about approval by an officer of the reviser’s own rank, and Tribunal orders. The Tribunal at Delhi (11 October 2021) rejected it; the Pune Bench (21 April 2025) rejected the plea where the approved order had not dealt with the issue revised.
• Section 292BC, inserted by the Finance Act, 2026 with effect from 1 April 2021, deems an approval in assessment proceedings “administrative and supervisory in nature”. In our view the bar argument is unlikely to survive it for approvals from that date; the assessee’s answer is that the section only validates approvals, and we have not seen a decision applying it in a revision. It does not reach an earlier approval (Bombay High Court, 5 August 2026).
• The section does not by itself show that inquiry was wanting. The approval file is part of the “record”: where it shows that the issue was before the approving officer, the allegation of no inquiry is hard to sustain; a bare approval covering many years proves little. The same holds for approvals under section 148B, the proviso to section 158BG and section 299(2) of the 2025 Act.
• For a completed (unabated) year in which the search found nothing incriminating, no addition could be made under section 153A (Supreme Court, 24 April 2023), and the assessee’s argument is that the order is not erroneous for omitting one. For an abated year the revising authority’s power is as wide as the Assessing Officer’s (Calcutta High Court, 7 May 2026).
• Tribunal Benches have allowed the assessee to answer a revision by showing that the assessment was a nullity (Mumbai, June 2016; Delhi, 27 March 2024; Amritsar, 15 September 2026). Among the decisions discussed in this Part those allowing the plea in a revision appeal are of the Tribunal, and the plea is confined to defects of jurisdiction.
• The Transfer Pricing Officer’s order under section 92CA is within section 263 from 1 April 2022. Whether an earlier order could be revised divides the Tribunal: the Mumbai Bench held on 20 December 2013 that it could not, the Rajkot Bench on 21 May 2024 that it could.
• The appeal lies to the Tribunal under section 253(1)(c), not clause (a), within two months from the end of the month in which the order is communicated. The Delhi High Court (3 August 2012) holds that the Tribunal can stay the consequential assessment; the first proviso to section 254(2A) provides for stay “in any proceedings relating to an appeal” on deposit of not less than twenty per cent of the amount payable, or security.
• If the revision order is quashed, the fresh assessment does not survive (Gujarat High Court, 10 September 2018, 22 August 2023 and 2 September 2023; Bombay High Court, 28 August 2026). In the last three the assessee had appealed the fresh assessment, so both orders should be appealed.
• A revision begun on or after 1 April 2026 of an order for a tax year beginning before that date remains under section 263 (section 536(2)(c) of the 2025 Act) and, in our view, does not have the sixty-day floor. Section 377 applies from tax year 2026-27 and, in our view, to a block assessment made under the 2025 Act (question 13); it adds the sixty-day floor and extends the clause on decided appeals to all four ranks.

Revising a search assessment

The kinds of search assessment

The provision under which a search case was assessed depends on the date of the search, and so does the approval that the order needed.

Search initiated	Assessment under	Approval of the order
Up to 31 March 2021	Section 153A, or section 153C for a person other than the one searched	Section 153D: prior approval of the Joint Commissioner, for each assessment year
1 April 2021 to 31 August 2024	Reassessment under section 147	Section 148B: prior approval of the Additional or Joint Commissioner or Director, where the Assessing Officer is below the rank of Joint Commissioner
On or after 1 September 2024, under the 1961 Act	Block assessment under Chapter XIV-B	Proviso to section 158BG: previous approval of the Additional or Joint Commissioner or Director
On or after 1 April 2026	Block assessment under the Income-tax Act, 2025	Section 299(2) of that Act

Each of the first three is an order of the Assessing Officer in a proceeding under the 1961 Act, and section 263 applies to it as it applies to a scrutiny assessment, subject to the argument on approval dealt with below; the fourth is revised, in our view, under section 377 (question 13). (The block assessment is described in the article on block assessment, and jurisdiction under section 153C in the article on the satisfaction note.) Section 536(2)(v) of the 2025 Act keeps every search initiated before 1 April 2026 under the repealed Act for “any proceedings connected”, so the first three rows are revised under section 263 whenever the revision is begun.

Where the revision notice in a search case alleges no inquiry (the Assessing Officer is said to have accepted an explanation about a seized paper, or to have left an item in the accounts unexamined), the law is the same as in any other case and is set out in Part 1. What is particular to search cases is the limit on what the Assessing Officer could himself have done, and the approval.

Brahambhatt: a search case decided on ordinary grounds

The Principal Commissioner of Income-tax (Central), Ahmedabad v. Rajesh Balvantrai Brahambhatt (Gujarat High Court, 7 September 2026) is the nearest Gujarat decision. After a search on 15 October 2019 on another group, material retrieved from a third party’s mobile phone was said to show on-money on a land transaction in which the assessee’s share was computed at Rs. 29.64 crore. The Assessing Officer issued a notice under section 142(1), considered the replies and, on 29 September 2022, completed the assessments for four years accepting the returned income, “after obtaining approval under Section 153D of the Act from the Additional CIT” (para 9). The Principal Commissioner set the assessments aside on three issues.

The Tribunal at Ahmedabad quashed the revision. In the passage the High Court reproduces (para 13, the Tribunal’s para 8.3), the Tribunal found that the Assessing Officer had confronted the assessee with the seized documents and statements and “consciously accepted the assessee’s explanation”, a case of “enquiry made, and view taken”, and that the same material had been taxed in assessment year 2023-24, so that there was no prejudice. The High Court was “in complete agreement with the reasons assigned by the Tribunal” (para 14) and held that no question of law arose (para 15).

On the approval the judgment says little. Only the Revenue was heard (para 1). Its proposed question (para 2) complained that “the competent authority overlooked the same while according the approval” under section 153D, and the Bench did not deal with the approval at all. Neither the High Court nor, in the passages reproduced, the Tribunal treated the approval as a bar to revision; but the assessee, having succeeded on inquiry, was not before the Court to raise one. The decision is authority that a seized-material case is decided on the Assessing Officer’s inquiry record; it is not authority on the approval either way.

The incriminating material limit

In Principal Commissioner of Income Tax, Central-3 v. Abhisar Buildwell P. Ltd. (Supreme Court, 24 April 2023, paras 11 to 14) the Court held that on a search all pending assessments abate; that in a completed (unabated) assessment no addition can be made under section 153A in the absence of incriminating material found in the search; and that where such material is found the Assessing Officer may take other material into account as well. For a completed year without such material the Court called reassessment under sections 147 and 148, subject to the conditions of those sections, “the only remedy available to the Revenue” (para 11), and in its conclusions said that “those powers are saved” (para 14). The Court’s conclusions do not deal with revision.

The assessee’s use of it. If the Assessing Officer had no power to make an addition on an item, his order is not erroneous for failing to make it, and the Commissioner cannot direct him to do in a fresh assessment what he could not do in the first. The Delhi High Court applied exactly that reasoning to a reassessment in The Commissioner of Income Tax II v. Software Consultants (17 January 2012). No addition had been made on the ground for which the assessment was reopened, and the Bench held (para 14) that the Assessing Officer “could not have made an addition on account of share application money” in the reassessment: “Accordingly, the assessment order is not erroneous.” The case is set out in Part 2.

For section 153A the proposition has been stated by the Tribunal. In M/s. Venezia Golf City Pvt Ltd v. PCIT, Central-1, New Delhi (ITAT Delhi, 19 September 2025) the Bench reproduced (para 4) a co-ordinate Bench order of 30 August 2024 which, for two unabated years in which the Revenue’s representative could not rebut the absence of incriminating material, held that the revision was unsustainable on that ground alone, because what the Assessing Officer could not do under section 153A could not be brought about through revision. That sentence belongs to the order reproduced. Venezia’s own reasoning is its para 5, which concerns the approval and is discussed in the next section.

The Revenue’s answer. Abhisar Buildwell protects only completed years. In Shyam Sel and Power Limited v. Principal Commissioner of Income Tax (Central), Kolkata-1 (Calcutta High Court, 7 May 2026) the search took place on 17 January 2019 and the year under revision was, in the Bench’s description, an abated year (para 50). The revision concerned the allocation of head office expenses to units claiming deduction under section 80-IA, on which nothing had been seized. The Bench accepted that for completed years the Assessing Officer’s jurisdiction is “indeed tethered to incriminating material” (para 50), but held that in an abated year his power is as wide as in a regular scrutiny, and (para 53):

Where the AO’s jurisdiction is restored to its full strength under the search regime, the PCIT’s revisionary power under Section 263 follows suit.

The Tribunal at Pune reasoned the same way for the year of search in Meenamani Ganga Builder LLP v. PCIT (Central), Pune (21 April 2025, para 16).

Where some incriminating material was found for the year, Abhisar Buildwell lets the Assessing Officer consider other material too, so the limit disappears, and Software Consultants is double-edged for the same reason: it turned on the fact that no addition had been made on the reopening ground. And in Abhisar Buildwell the assessees’ own tabulated submissions (para 4.1) accepted that, where proceedings under section 153A are dropped for want of incriminating material, the Revenue may on other information proceed under section 147 or section 263, subject to the conditions of those provisions.

Where it stands. We have not seen a High Court decision holding in terms that section 263 is unavailable in an unabated year for want of incriminating material; Shyam Sel accepts the premise by confining its holding to abated years. Our view is that the argument is sound for such a year, because the test of error is what the Assessing Officer could lawfully have done.

Approval under section 153D: does it bar revision

What the approval is

Section 153D of the 1961 Act provides that no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in section 153A(1)(b) or section 153B(1)(b) “except with the prior approval of the Joint Commissioner”. The proviso excludes cases where the order needs the approval of the Principal Commissioner or Commissioner under section 144BA(12). For the search-connected reassessments of the middle period, section 148B forbids an order of assessment, reassessment or recomputation by an officer below that rank “except with the prior approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director”. For block assessments following searches on or after 1 September 2024 the proviso to section 158BG says that “no such order shall be passed without the previous approval of the Additional Commissioner or the Additional Director or the Joint Commissioner or the Joint Director”. Section 299(2) of the 2025 Act repeats that for searches on or after 1 April 2026. The decisions have been given on section 153D; what follows applies equally to the other three.

The approving officer is thus an officer below the rank of Commissioner, and the reviser under section 263 is of Commissioner rank or above. Section 153D gives the approving officer no power to recall his approval, and section 263 does not reach the approval as an order; it reaches “any order passed therein by the Assessing Officer”.

The argument that approval bars revision has two forms. The hard form says that an approved order cannot be revised at all. The soft form says that it cannot be revised unless the revising authority examines the approval and finds it erroneous too.

The authorities for the assessee

Prakhar Developers. The Pr. Commissioner of Income Tax I v. Prakhar Developers Private Limited (Madhya Pradesh High Court at Indore, 1 April 2024) is the High Court order on which the assessee’s case on section 153D rests. The Tribunal at Indore had quashed a revision of an assessment under section 143(3) read with section 153A, following the Pune Bench, because the assessment had been passed with approval under section 153D. The Revenue’s appeal came up “for admission”; the order records “(NONE FOR THE RESPONDENT)”. The Bench gave three reasons for dismissing it.

First (para 07), counsel for the Revenue could not say whether the Pune Bench’s order had been challenged, and the Tribunal’s view “had attained finality”. Secondly (para 08):

For passing any order under Sections 143(3) & 153A of the Act, prior approval of Joint Commissioner is required under Section 153A of the Act, or Principal Commissioner or Commissioner as the case may be. Therefore, once prior approval had already been taken by the Assessing Officer and accepted the return submitted by the assessee, then the same authority cannot exercise the power under Section 263 of the Act to reverse the order of Assessing Officer.

Thirdly (para 09), the tax effect was below Rs. 1 crore.

The order is authority for the assessee, with these limits. It was made at the admission stage and unopposed. The Bench reached “the same authority” by running the Joint Commissioner together with the “Principal Commissioner or Commissioner as the case may be”; on the facts recorded the approval was that of an officer described as the Assistant Commissioner (para 4.5), the JCIT (the Revenue’s third question, para 05) and the ACIT (para 07), not of the revising authority, so the conclusion does not fit the case that was before the Bench. The reasoning does not depend on the approval being a quasi-judicial act. And the dismissal stands independently on the tax effect.

R. Srinivasan. R. Srinivasan v. The Asst. / Deputy Commissioner of Income Tax, Central Circle I, Coimbatore (Madras High Court, 11 September 2012) concerned a block assessment of 28 February 1997, following a search on 13 February 1996, passed with the previous approval of the Commissioner under section 158BG as it then stood. The Commissioner revised it, the Tribunal upheld the revision, and the High Court allowed the assessee’s appeal. Agreeing with a passage of the Karnataka High Court which it quotes (para 15), the Bench held that approval is not “a mere administrative nod” but an application of mind by the higher authority to the material (para 20), and that (para 17):

there can be no assumption of jurisdiction by an authority of the same rank under Section 263 of the Act.

The rationale is identity of rank: “the self-same rank Officer cannot once again review an order” made with the approval of the Commissioner (para 20), “the approving authority not being lower in rank than that of the revisional Appellate Authority himself”. The decision therefore supports the assessee’s premise, that approval is a considered act, but its holding is confined to approval by an officer of the reviser’s own rank.

The Tribunal line. The Pune Bench in Shri Ramamoorthy Vasudevan v. The Pr. Commissioner of Income Tax (Central), Pune (29 November 2018), following earlier Tribunal orders, held (para 8) that the exercise of revisional jurisdiction over an assessment passed with the prior approval of the Additional Commissioner “cannot stand”. The Delhi Bench in Venezia followed a co-ordinate Bench “for the principles of consistency” and summarised the rule as being that revision is not permissible where approval under section 153D is on record “unless the impugned approvals is also examined and vitiated” (para 5). The Amritsar Bench in Sandeep Singh v. PCIT-Central, Ludhiana (15 September 2026) held (para 16.5) that the Principal Commissioner could not revise “without recording a specific finding that the approval originally granted by the ld. JCIT u/s 153D is erroneous or legally invalid”, describing this (para 16) as a “jurisdictional threshold”. The Revenue’s representative there relied on the Principal Commissioner’s order, filed no written submissions and raised no oral objection (para 15). The assessment in that case was dated 31 March 2023; the order does not refer to section 292BC.

These orders trace the proposition to an Allahabad High Court order of 6 August 2012. The Delhi Bench in Kapil Mehta v. Pr. CIT (Central), Delhi-3 (11 October 2021, para 6.2), setting that order out, read it as upholding the Tribunal on the merits of the revision: the High Court had reproduced the Tribunal’s paragraph on approval but had “mainly agreed” with the Tribunal’s reasoning on the merits.

The authorities for the Revenue

T.N. Civil Supplies. In T.N. Civil Supplies Corporation Ltd. v. Commissioner of Income-tax (Supreme Court, 16 January 2003, [2003] 260 ITR 82) the question referred was whether the Commissioner had jurisdiction under section 263 “to revise an order passed by the Income-tax Officer with the approval of the Inspecting Assistant Commissioner under Section 144B” (para 1). The Court declined to disturb the uniform view of the High Courts against the assessee (para 4) and added (para 5):

In any event we are of the view that having regard to the subsequent amendments to the Act issued from time to time there was no scope for limiting the phrase “order passed by the Income-tax Officer” in Section 263 to exclude orders passed by the Income-tax Officer on the directions of a superior authority either under Section 144A or 144B.

The Gujarat High Court applied the order in Mehsana District Co-op. Milk Producers (2 April 2003, para 6). The Tribunal had held that an order made pursuant to the Inspecting Assistant Commissioner’s direction under section 144B(4) could not be revised; the Court held that view “clearly contrary to the decision of the Supreme Court”, and counsel for the assessee accepted that it could not be sustained.

Directions under section 144A “shall be binding on the Assessing Officer”. An approval binds no one; it permits the Assessing Officer to pass the order he has drafted. If an order dictated by a superior remains the Assessing Officer’s order for section 263, an order merely approved by one does so with greater reason.

Kapil Mehta. The Delhi Bench held (para 6.11) that “we do not find that there is any fetters on the powers of PCIT or CIT” except Explanation 1(c); that under section 153D “merely an approval was granted”, which is less than the directions considered in T.N. Civil Supplies (para 6.16); and that the assessee’s argument would take every assessment under section 153A or 153C out of section 263 (para 6.17).

Meenamani. The Pune Bench rejected the argument on the facts. The assessment order dealt only with on-money; the revision concerned unsecured loans, which the order did not discuss. The Bench held (para 20) that approval “has been taken only with regard to the observation of the AO about the issues arising out of the search”, and that “the approval order u/s.153D has been issued without taking into consideration the issue of unsecured loans”. On that reasoning an approval does not protect an issue on which the draft order was silent.

What section 292BC does to the argument

Section 292BC was inserted in the 1961 Act by section 33 of the Finance Act, 2026 and is deemed to have been inserted with effect from 1 April 2021:

Notwithstanding anything contained in this Act or in any judgment, order or decree of any Court, for the removal of doubts, it is hereby clarified that any approval given by an income-tax authority in relation to any assessment, reassessment or recomputation proceedings under this Act shall be deemed to be administrative and supervisory in nature and shall not be invalid or shall not be deemed to be invalid by reason of any insufficiency of the reasons recorded or by reason of any defect in the form or manner of its authentication or communication including whether digital signature have been appended to such approval or not, where such approval is granted electronically.

The section was written to answer the ground that an approval was mechanical; that subject is dealt with in Part 2 of the faceless series and on the provision page. Which way it cuts in a revision is argued as question 11.

What it says and what it does not

The section deems every approval in assessment, reassessment or recomputation proceedings “administrative and supervisory in nature”, notwithstanding anything in the Act or in any judgment. And it protects an approval from invalidity for two kinds of defect: insufficiency of the reasons recorded, and defects of authentication or communication. Its heading is “Circumstances in which approvals by income-tax authority not to be invalid”. It does not mention section 263, it does not speak of the effect of a valid approval, and it does not say that an approved order was passed without inquiry.

For the bar argument it is the deeming that matters. In our view the bar, to succeed, has to treat the approval as a superior’s adjudication that makes the order in substance his own, and an approval deemed administrative and supervisory cannot easily be so treated: it may still have to be given on consideration of the file (the provision page sets out what survives of that requirement), but a supervisory act, however carefully performed, leaves the order the Assessing Officer’s. On that view the bar argument is unlikely to survive the section for approvals within it. On the merits the section is neutral: the deeming fixes the legal character of the approval, not what the approving officer in fact looked at, and does not by itself show that inquiry was wanting.

The approval file

The file that went to the approving officer, and what he recorded, are records “relating to any proceeding under this Act” and so part of the record as Explanation 1(b) defines it, which is what the revising authority examines under sub-section (1); R. Srinivasan itself treats the approval as part of the record (para 20). A Principal Commissioner who alleges that the order was passed “without making inquiries or verification which should have been made” (Explanation 2(a)) must deal with what the approving officer saw. Where the file shows that the issue in the notice was raised and considered, a supervised and approved order is a poor candidate for that description.

The Revenue answers as follows. Approval covers what the draft order dealt with, not an issue on which it was silent (Meenamani). A single approval covering many years or many assessees, the omnibus approval described on the page on section 153D, proves little about any one issue. And the inquiry that Explanation 2(a) asks about is the Assessing Officer’s. The assessee’s retort, that the Revenue defends approvals as real safeguards when they are attacked as mechanical and cannot disown them in revision, is rhetoric and not a rule of law: the Revenue’s position, that approval is supervision and not adjudication, is the same in both proceedings.

Reach, and how the section has been applied

In Nikhil Nagindas Modi v. Deputy Commissioner of Income Tax - 1(2)(1), Mumbai and Others (Bombay High Court, 5 August 2026), a case of an unsigned approval under section 151, the Bench held (para 23) that the provisions “are made retrospective with effect from 1 April 2021 and therefore they would not apply to the facts of the present case where the approval has been granted on 30 March 2021”, and added that “we are not expressing any view on the validity or otherwise of the provisions of Section 292BC”. In The Income Tax Officer v. Joseph Chacko (Karnataka High Court, 16 April 2026) the Bench held only that the impact of the section “necessitates reconsideration upon appropriate pleadings” (para 6.1) and remitted the writ petition. The Tribunal at Hyderabad, in Clarion Agro Products Private Limited v. ACIT, Central Circle 3(1), Hyderabad (8 July 2026, paras 9.1 and 9.2), applied the section to an approval under section 153D, treating the non-mention of a Document Identification Number, factual discrepancies in the approval letter and the absence of a specific reference to the assessment records as matters of “the form and manner in which the approval has been recorded and communicated”.

An approval given before 1 April 2021 is outside the section, and an assessment so approved is governed by the case law as it stood. Approvals given on or after that date are inside it: many assessments under sections 153A and 153C, which were being completed well after 1 April 2021; every approval under section 148B of a reassessment following a search initiated on or after 1 April 2021; and every block assessment under the present Chapter XIV-B.

How the approval should be pleaded

An assessee may have two proceedings on the same assessment: an appeal against the assessment, in which the ground is that the approval was mechanical and the order void, and an appeal against the revision, in which the approval is relied on. In Kapil Mehta (para 6.0) both grounds were taken in the one appeal against the revision, and the Tribunal set them side by side and described them as contradictory. The first plea undercuts the second, and should not be taken without recognising that.

Our advice is the same on every file. Lead with the ordinary grounds (inquiry made, a possible view, no prejudice, limitation) and with the evidential use of the approval record. Take the bar as a subsidiary ground where the approval predates 1 April 2021, or where the forum is one in which Prakhar Developers or the Tribunal line binds or persuades, knowing its weakness. For an approval given on or after 1 April 2021, add that section 292BC does not bear on section 263 and keep the challenge to its validity open.

Block assessments and the 2025 Act

For a search initiated on or after 1 September 2024 the approval is under the proviso to section 158BG, given by an Additional or Joint Commissioner or Director. The same-rank reasoning of R. Srinivasan cannot arise, because the approver is below the reviser.

For a search on or after 1 April 2026 the approval is under section 299(2) of the 2025 Act and the validating provision is section 522(3), substituted by section 121 of the Finance Act, 2026:

Irrespective of anything contained in this Act, any approval given by an income-tax authority in relation to any assessment, reassessment or recomputation proceedings shall be deemed to be administrative and supervisory in nature and, shall not be invalid by reason of any insufficiency of the reasons recorded or by reason of any defect in the form or manner of its authentication or communication including whether digital signature have been appended to such approval or not, where such approval has been granted electronically.

It has the same deeming but no override of judgments and no “for the removal of doubts”. The assessee can say that decisions such as Prakhar Developers are therefore not displaced under the 2025 Act. The Revenue can say that no override was needed: the deeming is part of the Act from the first day, the judgments were given on a different statute, and the approver is below the reviser. Our view is that the bar argument has no better prospect under the 2025 Act than under the 1961 Act, and that the evidential use of the approval file is equally available under both.

The fresh order needs no second approval

In M/s Osho Forge Ltd. v. Commissioner of Income Tax Central, Ludhiana and another (Punjab and Haryana High Court, 27 April 2018) an assessment under section 153A approved by the Additional Commissioner had been set aside in revision and made afresh. The appeal was against the fresh assessment; the revision order was not under challenge. The Bench held that the fresh order needed no fresh approval: “The approval under Section 153D was not set aside”, the order on remand was “in continuation of earlier proceeding which was duly approved”, and “There is no requirement under Section 153D for prior approval for complying the remand directions.”

The decision is on section 153D. Section 148B, the proviso to section 158BG and section 299(2) are also worded as conditions on passing the order, and whether a fresh order after revision is such an order is open. The cautious course is to take the objection in the appeal against a fresh order passed without approval, knowing that Osho Forge is against it.

Revising a void order: is the invalidity of the assessment a defence

The second line of defence looks behind the revision at the assessment. If the assessment order was made without jurisdiction (on a person that had ceased to exist, on a notice that was never validly issued, by an officer who had no authority), the assessee says there is no order in law for the Commissioner to revise. The plea can be taken for the first time in the appeal against the section 263 order, by an additional ground.

The authorities for the assessee

M/s Westlife Development Ltd v. Principal Commissioner of Income-tax-5, Mumbai (ITAT Mumbai, June 2016) is the fullest treatment. The assessment had been made in the name of a company that no longer existed; the appellant was its successor. The Tribunal described the assessment as the primary proceeding and the revision as a collateral proceeding resting on it, and held (para 8.10) that “the assessee should be permitted to challenge the validity of order passed u/s 263 on the ground that the impugned assessment order was non est”. It then held the assessment void (para 9.9) and concluded (para 11) that “the Ld. CIT could not have assumed jurisdiction under the law to make revision of a non est order”.

Sandeep Singh took the same course for a search assessment. The assessee raised, by an additional ground, that the assessment under section 153C was itself without jurisdiction, and the Bench held (para 16.7) that an assessment suffering from a jurisdictional defect “cannot be validly revised u/s 263”. The notice under section 153C was issued on 18 February 2022, on a requisition under section 132A of cash found with an employee whom the police had apprehended in May and August 2019; the order does not give the date of the requisition. The notice was treated as vitiated because it was issued after the amendment of 1 April 2021 (para 16.7). Section 153C(3), as the order itself reproduces it (para 14), turns on the date of the search or requisition and not on the date of the notice, so the finding of invalidity is open to question unless the requisition was itself made on or after 1 April 2021. The order matters here for the course it took.

WSP Consultants India Private Ltd. v. Pr. CIT (ITAT Delhi, 27 March 2024) is a third instance, and there the defect was the Principal Commissioner’s own ground: the assessment made after a remand by the Tribunal had been passed without a draft order under section 144C. The Bench held that “any order” in section 263 means “a valid and enforceable order and not an order which is void ab initio” (para 17) and quashed the revision, on this ground and on the ground about Explanation 2(c) noted in Part 1.

The principle these orders draw on is older. Both the Delhi High Court and the Mumbai Bench quote the Supreme Court in Kiran Singh v. Chaman Paswan: a decree passed without jurisdiction is a nullity, and “its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings” (as quoted in The Commissioner of Income Tax (Central-II) v. Income Tax Appellate Tribunal & Ors., Delhi High Court, 3 August 2012, para 15). In that case, which arose from revisions of search assessments, the Delhi High Court applied the principle to the section 263 order itself: the assessee’s plea that the Commissioner had acted at the dictates of the Board could be raised in the appeals to the Tribunal, although the Revenue contended that an earlier order of the High Court had closed the point, because “neither consent or waiver can confer jurisdiction upon the authority” (para 20).

The Calcutta High Court did the same in Principal Commissioner of Income Tax-1, Surat v. Divine Light Finance Ltd. (3 July 2024). The revision order had been passed by a Commissioner who no longer had jurisdiction (the facts are given below); the assessee raised the point by an additional ground in the appeal against the consequential assessment. The Bench held the revision order a nullity (para 9) and held that the question “could be raised at any stage of the proceedings” (para 10).

In Gujarat the general authority is P.V. Doshi v. Commissioner of Income-tax, Gujarat (Gujarat High Court, 3 August 1977). It is a reassessment case under section 147, not a revision case. The assessee had given up his challenge to the reassessment notice in the first round and raised it again after a remand; no reasons had been recorded. The Court held that conditions which confer jurisdiction cannot be waived and that no finality attaches to an order made without jurisdiction:

If the original order is without jurisdiction it would be only a nullity confirmed in further appeals.

The Court drew the line between provisions that confer jurisdiction, or are mandatory in the public interest, and provisions that only regulate procedure for the benefit of the party, which can be waived.

The Revenue’s answers

In the decisions discussed here the Revenue’s case appears as argument, not as holding. In Westlife the Departmental Representative submitted (para 6) that the illegality of the original assessment “cannot be raised here during the proceedings challenging the order u/s 263”. The stronger points come from Westlife itself. The Tribunal accepted (para 8.1) that the original assessment had attained finality and could not be disturbed at the assessee’s instance, allowed the challenge “only for the limited purpose of examining whether the collateral (subsequent) proceedings have been initiated on a valid legal platform or not”, and closed by clarifying (para 13) that “our order shall have no bearing on the tax liability determined by the original assessment order”. An order that is a nullity for the purpose of revision but stands for the purpose of its demand is hard to explain.

The Commissioner of Income Tax (Central-II) and Divine Light Finance concern the jurisdiction of the revising authority, not the validity of the order revised. And P.V. Doshi protects only true defects of jurisdiction, a class that statute has narrowed: section 292B saves an assessment that is in substance and effect in conformity with the Act from invalidity for a mistake, defect or omission; section 292BB deems a notice duly served where the assessee appeared or co-operated in the assessment, unless he objected before it was completed; section 292BA deals with defects in quoting the Document Identification Number; section 292BC deals with approvals; and section 124(3), as reproduced in Divine Light Finance (para 7), bars a challenge to the Assessing Officer’s jurisdiction after the times stated there.

The point is argued as question 12. What counts as a nullity in the first place is covered in the articles on the section 143(2) notice and on assessment on a non-existent entity.

The Transfer Pricing Officer’s order

Before 1 April 2022

Until the Finance Act, 2022 section 263(1) spoke only of an order passed by the Assessing Officer. The order of the Transfer Pricing Officer under section 92CA(3) is a separate order, and the Assessing Officer must compute income in conformity with it.

In Essar Steel Limited v. Addl. Commissioner of Income Tax 5(1) (ITAT Mumbai, 31 October 2012) the Commissioner had revised the assessment order although the proposal before him was to revise the Transfer Pricing Officer’s order. The Tribunal held that an assessment order that conforms to a subsisting order of the Transfer Pricing Officer is not erroneous. On the wider question it said two things in the same paragraph (para 13): “We are not considering the issue whether the TPO order could be revised by the CIT or by the DIT as that issue is not before us at this moment”, and “the CIT has no jurisdiction over the TPO administratively and therefore, the CIT could not have revised the order under section 92C(3) passed by the TPO”. In Tata Communications Limited v. Dy. Commissioner of Income Tax (ITAT Mumbai, 20 December 2013) the Bench followed Essar Steel “as a matter of judicial precedence” and held (para 10) that “the Commissioner cannot exercise the revisionary jurisdiction under section 263 on the order passed under section 92CA(3) by the TPO”.

The Rajkot Bench took the other view in Swiss Singapore India P. Ltd. v. CIT (IT & TP), Ahmedabad (21 May 2024, pronounced at Ahmedabad). The Transfer Pricing Officer’s order was dated 26 July 2021; the Commissioner (IT & TP) revised it on 22 March 2023. The Tribunal read Essar Steel narrowly (para 24), held that “even prior to the amendment to section 263 of the Act, orders passed by TPO’s were amenable to revision” (para 27), and treated the amendment of 2022 as “merely clarificatory”, made to identify the correct officer (para 33). The order also records, as cited by the Revenue, a Hyderabad Bench order of 17 December 2020 (para 26) and a Mumbai Bench order (para 29) treating such orders as revisable, so the division is wider than Mumbai against Rajkot.

The amendment of 2022

The Finance Act, 2022 inserted, with effect from 1 April 2022, the words “or the Transfer Pricing Officer, as the case may be” in sub-section (1), in clauses (a) and (c) of Explanation 1 and in Explanation 2, and added clauses (ii) and (iii) on modifying or cancelling an order under section 92CA, Explanation 1(a)(iii) and Explanation 3. The Memorandum explaining the Finance Bill, 2022 states the reason in these words: “it is not clear as to who has the power under section 263 to revise the order of the TPO passed under section 92CA”. It goes on: “it is proposed to amend the provisions of section 263 of the Act so as to provide” that the Commissioner-rank authority “who is assigned the jurisdiction of transfer pricing” may revise an order of a Transfer Pricing Officer “working under his jurisdiction”, with effect from 1 April 2022.

The Memorandum does not say that such orders were outside section 263 before, and it does not use the language of clarification or retrospectivity. Both sides rely on it (question 14).

The machinery

Section 153(3) now covers a “fresh order under section 92CA” made in pursuance of a section 263 order, within the same twelve months from the end of the financial year. Section 153(5) covers effect given by the Transfer Pricing Officer otherwise than by a fresh order. And section 153(5A) gives the Assessing Officer two months, from the end of the month in which he receives the Transfer Pricing Officer’s order giving effect to the revision, to modify the assessment in conformity with it.

Which Commissioner. The enacted text of section 263(1) does not carry the Memorandum’s limitation; it names the four ranks without more. But Essar Steel observes that the Commissioner has no administrative jurisdiction over the Transfer Pricing Officer, and in Swiss Singapore the order was passed by the Commissioner assigned transfer pricing. A revision by the territorial Principal Commissioner is open to objection on that ground.

Limitation. The two years in section 263(2) run from the end of the financial year in which “the order sought to be revised” was passed. Where the order sought to be revised is the Transfer Pricing Officer’s, that is the date of his order, which is earlier than the assessment.

The 2025 Act. Section 377(1)(b) and (c) of the 2025 Act provide for an order modifying, or cancelling and directing afresh, “the order under section 166”, and section 377(8)(b) defines the Transfer Pricing Officer by reference to section 166(17). The time limits are in section 286(1), Table, Sl. No. 5 (fresh order under section 166: one year from the end of the financial year in which the section 377 order is passed) and Sl. No. 11 (modification of the assessment: two months from the end of the month in which the order under section 166 is received by the Assessing Officer). The reference to the Transfer Pricing Officer and its limits are in the article on section 92CA.

Faceless revision: the enabling provisions

Section 264A, inserted with effect from 1 November 2020, empowers the Central Government to make a scheme “for the purposes of revision of orders under section 263 or section 264”, including “a team-based revision of orders, with dynamic jurisdiction”. Section 264B does the same for giving effect to orders under sections 250, 254, 260, 262, 263 and 264. In each the power to direct that provisions of the Act shall not apply, or shall apply with modifications, carries the proviso that “no direction shall be issued after the 31st day of March, 2022”.

Under the 2025 Act the power is section 532, a single power to make a scheme “for any of the purposes of this Act”, with no cut-off date, and section 536(2)(u) deems a scheme notified under the repealed Act to have been made under the corresponding provision of the 2025 Act or, where there is none, under section 532.

The fresh assessment is different. In Principal Commissioner of Income Tax 2 Mumbai v. The Bombay Dyeing and Manufacturing Co. Ltd. (Bombay High Court, 28 August 2026, para 2) the order under section 143(3) read with section 263 had been passed “by the NFAC, Delhi”. Whether a consequential assessment goes to the faceless stream depends on the Board’s orders under section 144B(2), which are set out in Part 1 of the faceless series. Under those orders a search case, being assigned to a Central Charge, is outside faceless assessment, so the fresh assessment after revision of a search assessment stays with the Central Circle officer.

Who revises: rank and jurisdiction

The four ranks

Section 263(1) names “The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner”. The two higher ranks were added with effect from 1 November 2020 (by Act No. 38 of 2020, and substituted again by Act No. 13 of 2021 with retrospective effect from the same date). The same four ranks appear in Explanation 1(b) and in the opening of Explanation 2, and section 264(1) names them as well.

The amendment was not carried through in two places. Explanation 1(c) still speaks of “the powers of the Principal Commissioner or Commissioner under this sub-section”, and the sub-heading in the Act still reads “Revision by the Principal Commissioner or Commissioner”. The Department’s own edition of the section has carried a note that the higher ranks should also appear in clause (c) of Explanation 1 and in the heading. What follows from the omission in clause (c) is argued as question 13.

The Explanation on limitation is not a third instance. Its words “the jurisdictional Principal Commissioner or Commissioner” date only from 1 April 2025, after the four ranks came in, and recur in Explanation 1 to section 153, the Explanation to section 264(6) and section 254(3A); they identify the office whose receipt of the vacating order ends the exclusion.

Section 253(1)(c)(ii) provides an appeal against an order under section 263 passed by a Principal Chief Commissioner or Chief Commissioner (and by a Principal Director General, Director General, Principal Director or Director), so the Act contemplates such orders.

The jurisdictional Commissioner

The revising authority must have jurisdiction over the assessee on the date of the order. In Divine Light Finance the notice under section 263 was issued by the Commissioner of Income Tax, Kolkata-IV. A notification of 22 October 2014 transferred jurisdiction over the assessee to another Commissioner; the first Commissioner nevertheless passed the order on 19 January 2016. The Calcutta High Court held (para 8) that on that date “he was not the jurisdictional Commissioner and, thus, he inherently lacked jurisdiction”, that section 124(3) “has no application with respect to the proceedings under Section 263”, and that section 292BB, which concerns service of notice, did not help the Revenue. The assessee was not represented in the High Court, the facts were undisputed, and the Revenue argued only section 124(3).

Where a case was centralised after a search, the order under section 127 should be checked against the dates of the notice and of the revision order. The defect should be raised in the reply, although Divine Light Finance allowed it late.

The appeal to the Tribunal

Forum, time and fee

An order under section 263 is appealable by the assessee to the Appellate Tribunal under section 253(1)(c) of the 1961 Act: clause (c)(i) for an order of a Principal Commissioner or Commissioner, clause (c)(ii) for an order of the higher ranks. It is not an appeal under clause (a), which covers orders of the Commissioner (Appeals).

The appeal must be filed within “two months from the end of the month in” which the order is communicated to the assessee (section 253(3)). An order communicated on 14 March 2027 can be appealed up to 31 May 2027. The Tribunal may admit a late appeal for sufficient cause (section 253(5)).

The fee is governed by section 253(6). Clauses (a) to (c) scale the fee to the total income computed by the Assessing Officer “in the case to which the appeal relates”; clause (d) fixes five hundred rupees where the subject matter of the appeal “relates to any matter, other than those specified in clauses (a), (b) and (c)”. Our view is that clause (d) is the natural fit, because a section 263 order is not an order computing total income; the registry’s practice should be checked before filing. An application for stay of demand carries a fee of five hundred rupees (section 253(7)).

Under the 2025 Act the appeal lies under section 362(1)(b)(ii) for an order of a Principal Commissioner or Commissioner under section 377 and under section 362(1)(c) for an order of the higher ranks; the time is in section 362(3), condonation in section 362(5), the fee in section 362(6) and the fee on an application for stay of demand in section 362(8), in the same terms.

What the Tribunal decides

The Tribunal tests the order on the grounds the Commissioner gave. In Commissioner of Income-tax v. Jagadhri Electric Supply & Industrial Co. (Punjab and Haryana High Court, 17 March 1981) the Court held: “The Tribunal cannot uphold the order of the Commissioner on any other ground which, in its opinion, was available to the Commissioner as well.” That rule, and the question whether a breach of hearing leads to annulment or to a remand to the Commissioner, are dealt with in Part 2.

Stay of the fresh assessment

Filing the appeal does not stop the Assessing Officer. The fresh assessment has its own limitation running from the revision order, so the officer has reason to proceed. The question is whether the Tribunal can stay him.

The Act provides for stay. Under the first proviso to section 254(2A) the Tribunal may pass an order of stay “in any proceedings relating to an appeal filed under sub-section (1) of section 253” for up to one hundred and eighty days, on condition that the assessee deposits not less than twenty per cent of the tax, interest, fee, penalty or other sum payable, or furnishes security of equal amount. The second and third provisos allow extension up to three hundred and sixty-five days in all, after which the stay stands vacated “even if the delay in disposing of the appeal is not attributable to the assessee”. Section 363(6) to (8) of the 2025 Act are to the same effect, and an appeal against a revision order is an appeal under section 253(1). The difficulty is the condition: a revision order raises no demand, and until the consequential order is passed there is usually no amount of which twenty per cent can be deposited.

The decisions rest the power on the appellate jurisdiction itself. In Income Tax Officer v. M.K. Mohammed Kunhi (Supreme Court, 11 September 1968), a case of stay of recovery, the Court held that the Tribunal “must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction”. The Delhi High Court applied it to revision in The Commissioner of Income Tax (Central-II) (para 21). The Tribunal had stayed the assessment proceedings consequent on section 263 orders, and the Revenue challenged the stay as “barred by the principle of res judicata” (para 12), not for want of power. The Bench held that the stay was “supported by ample authority” and was “part of the exercise of the appellate power of the Tribunal under Section 254 (1)” (section 363(1) of the 2025 Act), its object being to prevent multiplicity of proceedings and “to ensure that the fruits of success in the appeals are not rendered meaningless or nugatory”; no error in the exercise of the discretion was shown.

The Tribunal has not always accepted that it has the power. In VIP Housing and Properties v. The Income Tax Appellate Tribunal (Madras High Court, single judge, 31 March 2022) the Tribunal at Chennai had rejected the assessee’s application for stay of the revision order “for want of power as expressed by the Tribunal” (para 2). The High Court did not decide whether the Tribunal has the power. It observed that if the Assessing Officer went ahead the appeal would be made “otiose” (para 10), and ordered that the assessment could proceed but that no demand or further proceeding was to follow an adverse order until the Tribunal decided the appeal, by a fixed date (para 11). The same court followed that course on 24 April 2025 in Mahasakthi Bio Enercon Private Limited v. The Joint Commissioner of Income Tax (OSD), Central Circle 1, Coimbatore and others, where the consequential order had already been passed and a demand raised: the Department was directed not to give effect to the order until the appeal against the revision was disposed of, and the Court said that it was for the assessee to challenge the assessment order.

The fresh assessment: appeal both orders

Three Gujarat decisions settle what happens to the fresh assessment when the revision order goes. In Principal Commissioner of Income Tax 2 v. Sabarkantha District Co-op. Purchase and Sales Union Ltd. (Gujarat High Court, 10 September 2018) the Tribunal had held that the consequential order would not survive the setting aside of the revision order, and the Revenue’s appeal was dismissed because its appeal against the setting aside had itself been dismissed. In The Principal Commissioner of Income Tax 1 v. Sarjan Cooperative Housing Society Ltd. (Gujarat High Court, 22 August 2023) the Revenue’s appeal against the quashing of the revision was still pending, and the Revenue asked that the two be heard together. The Bench refused: the revision order having been quashed, “the consequential order of assessment dated 28.06.2019 would not stand” (para 6), and the pendency of the Revenue’s appeal “would not be a ground for this appeal to be kept pending” (para 7). It noted that the Assessing Officer had gone ahead although asked to keep the proceedings in abeyance. The Principal Commissioner of Income Tax 1 v. M/s Elecon EPC Projects Ltd (Gujarat High Court, 2 September 2023) follows Sarjan.

The Bombay High Court went a step further in Bombay Dyeing. The Tribunal had quashed the revision order on 13 September 2021; the consequential order was nevertheless passed on 31 October 2021. The Bench held (paras 8 and 10) that in the absence of a subsisting order under section 263 the Assessing Officer had no jurisdiction to pass it, the Revenue’s pending appeal notwithstanding, and (para 9) that “the assessee was correct in its approach in assailing the said order” before the Commissioner (Appeals).

Appeal both. In Sarjan, Elecon and Bombay Dyeing the assessee had appealed the fresh assessment, and it was annulled in that appeal. None of these decisions says that the fresh assessment disappears by itself. The appeal against the fresh assessment lies to the Commissioner (Appeals) in the ordinary way and should be filed within its own time, whatever the stage of the appeal against the revision.

What can be argued in the second appeal. In Malabar Institute of Medical Sciences Ltd. v. The Deputy Commissioner of Income Tax (Kerala High Court, 17 March 2025) the assessee had not appealed the section 263 order, which set the assessment aside for fresh consideration, and the Tribunal dismissed the appeal against the fresh assessment as not maintainable for that reason. The High Court reversed: the remand was an open one, and “the assessee need not have questioned the order under Section 263 in a separate proceeding” (para 8) in order to contest the fresh assessment on its merits. That does not let the assessee attack the revision itself in the second appeal; Divine Light Finance allowed it for a defect of jurisdiction. Where the Commissioner has decided the issue and left the Assessing Officer only to compute, the revision order must be appealed. The scope of the fresh assessment in Gujarat is confined to the items dealt with in the revision (Commissioner of Income-tax v. D.N. Dosani, Gujarat High Court, 5 October 2005, discussed in Part 2).

If the Revenue succeeds in the High Court. Sarjan (para 7) says that the Assessing Officer “will have to undertake a fresh exercise in light of the directions therein”, and Bombay Dyeing (para 11) that “a fresh assessment order in that regard would be required to be passed in accordance with law”. The annulled order does not revive. Neither decision says within what time the fresh exercise must be completed, or whether section 153(3) or section 153(6)(i) governs it.

The appeal against the original assessment. Where the assessee had appealed the original assessment and the Commissioner (Appeals) dismissed that appeal as infructuous because of the revision, the appeal has to be restored if the revision is later cancelled. The Mumbai Bench so directed in Essar Steel India Ltd. v. Addl. Commissioner of Income Tax (30 April 2013). The assessee should ask for that restoration, or object to the dismissal at the time.

Section 263 and section 264 compared

The choice between an appeal and section 264 is affected by what section 263 leaves open to the Department. The assessee’s remedy under section 264, and how far it reaches a claim not made in the return, is the subject of the article on section 264; what follows is the comparison only.

	Section 263	Section 264
Who moves	The revising authority, of its own motion	The revising authority of its own motion, or the assessee by application
Authority	Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner	The same four ranks
Orders reached	An order of the Assessing Officer or, from 1 April 2022, the Transfer Pricing Officer, including the orders named in Explanation 1(a)	“any order other than an order to which section 263 applies passed by an authority subordinate to him”
Test	Erroneous in so far as it is prejudicial to the interests of the revenue; Explanation 2 deems four classes of order to be so	Such order “as he thinks fit”, “subject to the provisions of this Act”, “not being an order prejudicial to the assessee”
Time to act	Order within two years from the end of the financial year in which the order sought to be revised was passed	Own motion: not if the order was made more than one year previously. Application: within one year of communication or knowledge, whichever is earlier, with condonation; order within one year from the end of the financial year of the application
Findings or directions of the Tribunal or a court	No time limit for revising an order passed in consequence of, or to give effect to, such a finding or direction (sub-section (3))	No time limit for the order on an application, where it is passed in consequence of, or to give effect to, such a finding or direction (sub-section (7))
Effect of an appeal	Power extends to matters not considered and decided in the appeal (Explanation 1(c))	Barred while an appeal lies and the time has not expired or the right is not waived, and where the order has been made the subject of an appeal (sub-section (4))
Hearing	Mandatory: “after giving the assessee an opportunity of being heard”	Not stated in the section; a hearing is nevertheless required (see the article on section 264), and the order cannot be prejudicial to the assessee
Fee	None	Five hundred rupees
Sixty-day floor after exclusions	None under the 1961 Act; section 377(7) under the 2025 Act	None under the 1961 Act; section 378(9) under the 2025 Act
Remedy against the order	Appeal to the Tribunal, section 253(1)(c)	No appeal; writ petition
2025 Act	Section 377	Section 378

What the assessee can get. Nothing beyond resisting the revision. In the fresh assessment the assessee is heard on the items the Commissioner dealt with, and a claim outside them belongs in an appeal or under section 264.

Choosing a remedy. An assessee with one adverse point and one favourable point must choose his remedy for the adverse point, and the Department keeps its remedy on the favourable one. If he appeals the adverse point, that point is outside section 264. Sub-section (4)(c) bars revision “where the order has been made the subject of an appeal”; how far that bar reaches for a point the appeal does not raise is disputed, and both readings are set out in the article on section 264. The favourable point, not being a matter considered and decided in the appeal, stays open to revision under section 263 by Explanation 1(c). An appeal does not buy immunity for the rest of the order; see the doctrine of merger and Part 2.

A pending application. Nothing in section 263 makes it yield to an application under section 264. The ground was taken in Sandeep Singh for one of the two years (that section 263 had been invoked after a revision application under section 264 was moved) and was not decided, the appeal being allowed on other grounds.

Revising a section 264 order. An order under section 264 is an order of the revising authority, not of the Assessing Officer or the Transfer Pricing Officer, and so is not an order that section 263(1) reaches.

Time. The limits in the table are not symmetrical. An assessee who waits to see whether a revision notice comes may well have lost the unconditional year under section 264 by the time it does.

Section 377 of the Income-tax Act, 2025, and the transition

What changes and what does not

Section 377 of the 2025 Act re-enacts section 263. The test, the limitation period and the override for orders giving effect to findings of the Tribunal and the courts are unchanged. The changes are these.

Subject	Section 263 (1961 Act)	Section 377 (2025 Act)
Authority	Four ranks named in sub-section (1)	“Competent Authority”, defined in sub-section (8)(a) as the same four ranks
Orders and record	Explanation 1, “For the removal of doubts”, with “on or before or after the 1st day of June, 1988” and “shall be deemed always to have included”	Sub-section (2), as operative text, without those words
Matters outside a decided appeal	Explanation 1(c): “the powers of the Principal Commissioner or Commissioner”	Sub-section (2)(c): “the powers of the Competent Authority”
Deemed error	Explanation 2, “it is hereby declared”; “or” after clause (c) only	Sub-section (3), operative; “or” after each of clauses (a), (b) and (c); Board instructions under section 239 in place of section 119
Limitation	Sub-section (2): two years from the end of the financial year in which the order was passed	Sub-section (4): the same
Orders giving effect to findings	Sub-section (3): “Notwithstanding anything contained in sub-section (2)”	Sub-section (5): “Irrespective of anything contained in sub-section (4)”
Exclusions	Explanation below sub-section (3): rehearing under the proviso to section 129; stay	Sub-section (6): rehearing under section 244(2); stay
Sixty-day floor	None	Sub-section (7): if less than sixty days remain after the exclusions, the period is extended to sixty days
Transfer Pricing Officer	Order under section 92CA; defined in Explanation 3	Order under section 166; defined in sub-section (8)(b) by section 166(17)

The sixty-day floor is new: under section 263 a revision with a week left when the certified copy of the order vacating a stay is received must be completed in that week. And the deeming clauses are no longer a declaratory Explanation, which removes, for the 2025 Act, the argument about whether they are clarificatory (Part 1, question 2).

Section 377(6)(b), like the Explanation below section 263(3) since 1 April 2025, ends the stay exclusion on receipt of the vacating order by “the jurisdictional Principal Commissioner or Commissioner”, and Sl. No. 5 of the Table in section 286(1) speaks of a section 377 order “passed by” the same office. These words are not a survival of two-rank drafting; how they apply where a higher rank conducts the revision is open, and is set out on the provision page.

The Finance Act, 2026 did not amend section 263 of the 1961 Act or section 377 of the 2025 Act. What it did that bears on revision (section 292BC, section 522(3), and sections 254(3A) and 363(10) on electronic communication of the Tribunal’s orders) is dealt with above and in Part 2.

The transition

The 1961 Act is repealed by section 536(1) of the 2025 Act. Section 536(2) saves it for past years. Four clauses bear on revision.

Clause (c):

the provisions of the repealed Income-tax Act shall continue to apply to any proceeding pending on the date of commencement of this Act and to any proceedings initiated on or after the 1st April, 2026 (including notices, assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeals) in respect of any tax year beginning before the 1st April, 2026 and such proceedings shall be carried out as per the procedure specified in the repealed Income-tax Act;

Clause (e) continues a revision pending on commencement before any income-tax authority as if the 2025 Act had not been enacted. Clause (k) provides that where the period for a revision under the repealed Act had expired on or before commencement, nothing in the 2025 Act enables it to be made by reason of a longer period or a provision for extension. Clause (v) keeps a search initiated before commencement, and “any proceedings connected”, under the repealed Act. Sub-section (4) applies section 6 of the General Clauses Act, 1897.

A notice issued in 2027 proposing to revise an assessment for assessment year 2024-25 is a notice under section 263. The test is that of the 1961 Act, limitation is under section 263(2) and its Explanation, the appeal is under section 253(1)(c) and the fresh assessment is governed by section 153. Section 263 has no sixty-day floor, and clause (c) keeps such a revision under the repealed Act “as per the procedure specified in the repealed Income-tax Act”; in our view the floor in section 377(7) is therefore not available to it. Under clause (k), a revision for which the two years, after exclusions, ran out before 1 April 2026 is not revived by section 377(7).

Section 377 first applies to an order for tax year 2026-27 (a block assessment under the 2025 Act apart). The general rules on which Act governs are in which Act governs your appeal.

One case does not fit neatly: a block assessment made under the 2025 Act, whose block period under section 301(a) includes the six tax years preceding the tax year of the search and so reaches tax years that began before 1 April 2026. That is argued under question 13; our view is section 377.

Gujarat: what the record shows

The Gujarat decisions relevant to this Part, by subject and in date order within each (High Court unless stated):

Search assessments and approval

1. Mehsana District Co-op. Milk Producers, 2 April 2003: an order made on directions under the former section 144B is revisable, applying T.N. Civil Supplies.
2. JMC Projects (India) Limited v. Principal Commissioner of Income Tax (Central), 21 December 2015: the argument that the assessments were “made in consultation with higher authorities as required under the law” was raised against a revision notice (para 5) and not dealt with; the notice was quashed for want of prejudice.
3. Rajesh Balvantrai Brahambhatt, 7 September 2026: revision of four assessments approved under section 153D quashed because the Assessing Officer had inquired and taken a view; the effect of the approval not decided.

Jurisdiction and nullity

4. P.V. Doshi, 3 August 1977: conditions that confer jurisdiction cannot be waived, and an order without jurisdiction acquires no finality by being confirmed in appeal. A reassessment case.

The fresh assessment

5. D.N. Dosani, 5 October 2005: the fresh assessment is confined to the items dealt with in the revision.
6. Sabarkantha District Co-op. Purchase and Sales Union, 10 September 2018: the consequential order does not survive the setting aside of the revision.
7. Sarjan Cooperative Housing Society, 22 August 2023: the same, although the Revenue’s appeal against the setting aside was pending; a fresh exercise if the Revenue succeeds. Elecon EPC Projects, 2 September 2023, follows it.

The Transfer Pricing Officer

8. Swiss Singapore India, ITAT Rajkot (pronounced at Ahmedabad), 21 May 2024: an order of the Transfer Pricing Officer passed before 1 April 2022 could be revised; the amendment of 2022 treated as clarificatory.

We have not seen a decision of the Gujarat High Court on: whether approval under section 153D, section 148B or section 158BG bars or conditions revision; how section 292BC bears on revision; section 263 in an unabated year in which nothing incriminating was found; the invalidity of the assessment as a defence in the revision appeal; the Tribunal’s power to stay the consequential assessment; a Transfer Pricing Officer’s order passed before 1 April 2022; the two-rank wording of Explanation 1(c); or the provision of section 153 under which a fresh order is made after the High Court restores a revision.

Open questions, argued both ways

Questions 1 to 4 are in Part 1 and questions 5 to 9 in Part 2. The five in this Part are argued here, with reference to the sections above for the detail of the authorities.

Question 10: does approval under section 153D bar revision of the assessment?

For the assessee. The approval is a condition of the order, and the Department has had its superior scrutiny before the order issued: “What he proposes to do under Section 263 of the Act, he should have done at the stage of approval” (the Karnataka High Court, as quoted in R. Srinivasan, para 15). Prakhar Developers and the Tribunal line are in point. T.N. Civil Supplies does not conclude the matter: the appeals were dismissed because of “the uniformity of interpretation by the several High Courts” on section 144B (para 4), and the Court’s own view, introduced by “In any event”, rested on unidentified “subsequent amendments” and spoke only of orders passed “on the directions of a superior authority” (para 5). Explanation 1(a), amended as recently as 2022 to add the Transfer Pricing Officer’s order, includes orders made on directions under section 144A and still says nothing of approved orders.

For the Revenue. An approved order is still an order “passed therein by the Assessing Officer”. The Supreme Court refused to read the phrase down for orders passed on binding directions, on a question framed in terms of an order passed “with the approval of” a superior; the Gujarat High Court has applied that; and an approval, which binds no one, is a weaker case for exclusion. Explanation 1 is for the removal of doubts and names section 144A because doubt had arisen there. The reviser is above the approver, so neither R. Srinivasan nor the Karnataka passage, which concerned approval by the Commissioner himself, applies. Prakhar Developers was unopposed, at admission, and its “same authority” does not fit its own facts. On the assessee’s argument no assessment under section 153A or 153C could be revised (Kapil Mehta, para 6.17).

Where it stands, and our view. The Tribunal is divided and one High Court order on section 153D, made at admission, is for the assessee; we have not seen a decision of the Supreme Court or the Gujarat High Court on section 153D. Our view is that approval has never taken the order outside section 263: the order remains “any order passed therein by the Assessing Officer”, T.N. Civil Supplies refused to read the phrase so as to exclude orders passed on a superior’s directions, Explanation 1(a) confirms the breadth, and the rank of the reviser disposes of R. Srinivasan. That is a view on a point that is not settled. The soft form is better understood as a point on the merits than as a jurisdictional threshold, and it is curable: a Principal Commissioner can meet Venezia and Sandeep Singh by examining the approval and recording a finding on it. The approval matters as evidence, not as a bar; how the ground should be pleaded is set out above.

Question 11: which way does section 292BC cut in a revision?

For the Revenue. The section is a second answer to the bar. The approval is deemed administrative and supervisory notwithstanding “any judgment, order or decree of any Court”, and an approval of that character cannot easily be treated as a superior’s adjudication that must be set aside first. The soft form assumes an act capable of being found erroneous in the sense of section 263; a supervisory step is not an order at all. The Tribunal has applied the section to an approval under section 153D (Clarion Agro). On the merits the Revenue’s answers are those given above on the approval file.

For the assessee. The section is in terms a validating provision: an approval “shall not be invalid” for insufficiency of the reasons recorded or for defects of authentication or communication. The deeming serves that purpose and says nothing of section 263; a fiction enacted to save approvals from invalidity should not be carried into the separate question of which orders can be revised. Calling an approval administrative does not dispense with consideration of the file, so the point in R. Srinivasan, that the superior has applied his mind to the order, survives. Prakhar Developers (para 08) does not rest on the approval being quasi-judicial. Sandeep Singh (paras 16 to 16.6) states a requirement about the Principal Commissioner’s reasoning, that he deal with the approval and find it erroneous, which a supervisory approval does not obviously displace; it was decided after the section was enacted, on an assessment of 31 March 2023. The override names a “Court”, and the soft form is a Tribunal line. Counsel told the Bombay High Court that the validity of the section is under challenge (Nikhil Nagindas Modi, para 8), and the section does not reach approvals before 1 April 2021 (para 23).

Where it stands, and our view. We have not seen a decision that considers the section in a revision, and the point is open. Our view is that, for approvals given on or after 1 April 2021, the bar argument is unlikely to survive the section, which adds a second answer to an argument that in our view already failed on the text and on T.N. Civil Supplies. The assessee’s points are real ones, and the ground can still be taken in the subsidiary way already described. On the merits the section decides nothing: it does not by itself show that inquiry was wanting, and the evidential use of the approval is only as good as the file.

Question 12: is the invalidity of the assessment a defence to revision?

For the assessee. An order made without jurisdiction is a nullity whose invalidity can be set up wherever it is relied on, including in collateral proceedings (Kiran Singh, as quoted by the Delhi High Court), and it gains no finality from the assessee’s failure to challenge it (P.V. Doshi). The revision relies on the assessment and seeks to enlarge it; if the plea were shut out, a void assessment would become the foundation of a second one with a fresh period of limitation (the order quoted in Westlife, para 10.1). Westlife, WSP Consultants and Sandeep Singh allowed the plea.

For the Revenue. The assessment was not appealed and is final, and an assessee who accepted it should not use the Revenue’s proceeding to attack it. Westlife preserves the original demand (para 13), which cannot be reconciled with calling the order a nullity. The High Court decisions relied on concern the jurisdiction of the revising authority. P.V. Doshi is confined to conditions that confer jurisdiction, and sections 292B, 292BB, 292BA, 292BC and 124(3) have removed many defects from that class.

Where it stands, and our view. Among the decisions discussed in this Part the authority for the assessee in a revision appeal is of the Tribunal. Our view is that the plea is available where the defect is one of jurisdiction in the strict sense recognised in P.V. Doshi, because section 263 presupposes an order, and that it fails where the defect is curable under the sections named. It should be taken by a specific additional ground with the facts on record, after weighing the Tribunal’s own position that the original demand stands and any ground taken elsewhere that depends on the assessment being valid.

Question 13: can the higher ranks revise matters outside a decided appeal, and which Act governs a revision begun on or after 1 April 2026?

The question has two parts.

The two-rank wording of Explanation 1(c). Where the assessment has been the subject of an appeal, Explanation 1(c) says that “the powers of the Principal Commissioner or Commissioner” extend to matters not considered and decided in the appeal. It does not mention the Principal Chief Commissioner or Chief Commissioner, who since 1 November 2020 can exercise the power in sub-section (1).

For the assessee. A power exercised against the assessee is read strictly. Before clause (c), the view in Bombay was that once an assessment was the subject of an appeal, “the whole of it merges in that of the appellate order” (Ritz Ltd. and another v. Union of India and others, Bombay High Court, single judge, 23 March 1990, para 8), and in Commissioner of Income-tax, Bombay v. M/s. Amritlal Bhogilal & Co. (Supreme Court, 28 April 1958) the assessment orders modified in appeal were treated as having ceased to be the Income-tax Officer’s orders, which the Commissioner could not revise. In Commissioner of Income Tax, Gujarat-I v. Shri Arbuda Mills Ltd. (Supreme Court, 23 January 1996) the Court rested the power over items not carried in appeal on clause (c), under which (para 5) the powers “shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in an appeal”. That power therefore comes from clause (c), which confers it on two ranks. Parliament did not add the higher ranks to the clause in 2020, and it has since returned to the clause without adding them: the Finance Act, 2022 (Act No. 6 of 2022), with effect from 1 April 2022, inserted in clause (c) itself the words “or the Transfer Pricing Officer, as the case may be”, and left “the powers of the Principal Commissioner or Commissioner” as it was. A clause amended after the higher ranks came in, and not extended to them, is not easily explained as an oversight.

For the Revenue. Clause (c) is declaratory. Explanation 1 opens “For the removal of doubts, it is hereby declared”, and clause (c) declares the reach of the powers under the sub-section, which confers them on four ranks. On the Supreme Court’s authority merger is no wider than the subject of the appeal: in Amritlal Bhogilal, under section 33B of the 1922 Act, the Court held that “what merges in the appellate order is the Income-tax Officer’s order under appeal and not his order of registration”, which was not and could not be the subject of the appeal, and that the revisional power “must be determined solely by reference to the terms of s. 33B itself”. (The decision does not say how much of an assessment order merges when only part of it is appealed.) The omission is the residue of an amendment not carried through, as the surviving sub-heading shows, and section 253(1)(c)(ii) contemplates revision orders by the higher ranks. The amendment of 2022 does not show a choice: it was directed only at the Transfer Pricing Officer, the same words being inserted in sub-section (1), in clauses (a) and (c) of Explanation 1 and in Explanation 2 and nothing being said of the ranks. The Department’s own edition has carried a note that the higher ranks should also appear in clause (c), and section 377(2)(c) of the 2025 Act reads “the powers of the Competent Authority”.

Where it stands, and our view. We have not seen a decision on the point. Our view is that the omission should not defeat a revision: the source of the power is sub-section (1), which names four ranks, and clause (c) declares the reach of the powers “under this sub-section”. We do not rest that view on Amritlal Bhogilal, and we hold it with less confidence than a plain drafting slip would allow. The amendment of 2022 is the assessee’s best point, because the clause was reopened and the two ranks were left; we think it is met by the fact that the amendment dealt only with the Transfer Pricing Officer, but a court could take it the other way, and Arbuda Mills gives the argument a footing. An assessee facing a revision by a Principal Chief Commissioner or Chief Commissioner on a matter outside a decided appeal should take the point. It arises only where a Principal Chief Commissioner or Chief Commissioner makes the revision, and that authority must in any case have jurisdiction over the assessee: on Divine Light Finance (para 9) an order under section 263 by a Commissioner having no territorial jurisdiction over the assessee is a nullity. It cannot arise under section 377.

Which Act. For an ordinary assessment the answer is in section 536(2)(c) and is not in real doubt: a revision begun on or after 1 April 2026 in respect of a tax year beginning before that date is under the 1961 Act, procedure included. The open case is the block assessment made under the 2025 Act after a search on or after 1 April 2026, covering earlier tax years.

For section 263. Clause (c) keeps the repealed Act for a revision “in respect of any tax year beginning before the 1st April, 2026”, and the block assessment is in part an assessment of such tax years. The absence of a sixty-day floor in section 263 is a protection the saving clause preserves.

For section 377. Section 263 reaches an order passed in “any proceeding under this Act”, meaning the 1961 Act, and a block assessment under the 2025 Act is not such a proceeding. Section 377 reaches an order in any proceeding under the 2025 Act. Clause (v) of section 536(2) draws the line for search cases by the date of the search, not by the tax year: a search before commencement stays under the repealed Act, which implies that a search after commencement, with the proceedings connected with it, is under the 2025 Act. Section 299(2) is itself expressed to apply to searches on or after commencement.

Our view. Section 377 governs the revision of a block assessment made under the 2025 Act, whatever years the block period covers, because the power to revise attaches to the order and to the Act under which it was made, and because clause (c) preserves the repealed Act for proceedings that the repealed Act itself provides for, which such a block assessment is not. The appeal then lies under section 362 and the sixty-day floor applies. The contrary is arguable on the words of clause (c), and the point is open; it should be taken in the reply where the Department proceeds under the wrong section.

Question 14: could a Transfer Pricing Officer’s order passed before 1 April 2022 be revised?

For the assessee. Before the amendment section 263 named only the Assessing Officer, and Tata Communications held in terms that the Commissioner could not revise it. The Finance Act, 2022 inserted new words, new clauses and a new sub-section (5A) in section 153, all with effect from 1 April 2022. The Memorandum says “it is proposed to amend … so as to provide” and gives a prospective date. A new power to unsettle an order is not presumed to reach orders already made, and the absence of any machinery before the amendment shows that the power did not exist.

For the Revenue. The Memorandum identifies the doubt as being “who has the power under section 263 to revise the order of the TPO”, not whether the power existed; Swiss Singapore reads the same words, as they appear in the Board’s Explanatory Notes to the Finance Act, 2022 reproduced in the order (para 31), that way (para 32) and holds the amendment clarificatory (paras 27 and 33). Essar Steel expressly left the question open; it decided that an assessment conforming to the Transfer Pricing Officer’s order was not erroneous, observing that the Commissioner had no administrative jurisdiction over him. On the text, the Transfer Pricing Officer’s order was brought in by adding clause (iii) to Explanation 1(a), which is expressed to be “For the removal of doubts” and to cover orders passed “on or before or after the 1st day of June, 1988”. And a revisional power looks to the date on which it is exercised: in Swiss Singapore the revision was made on 22 March 2023, when the amended section was in force and the two years had not run.

Where it stands, and our view. The Tribunal is divided, and we have not seen a High Court decision on the point. Our view is that the assessee’s reading is the stronger on the text. Parliament dated the insertion, including the insertion into Explanation 1(a), from 1 April 2022, and a declaratory opening cannot back-date a clause that Parliament has dated; “so as to provide” is the language of a new provision. Against that, in Gujarat the Rajkot Bench’s order stands for the Revenue at the level of the Tribunal. The question is now confined to pending appeals: an order of the Transfer Pricing Officer passed on or before 31 March 2022 could be revised, on any view, only up to 31 March 2024, subject to the exclusions for a stay or a rehearing.

On a live file

1. Fix the Act and the section. Section 263 for an order relating to a tax year beginning before 1 April 2026 and for every search initiated before that date, whenever the revision is begun (section 536(2)(c) and (v) of the 2025 Act); section 377 for orders for tax year 2026-27 onwards and, in our view, for block assessments made under the 2025 Act. Object in the reply if the notice cites the wrong provision.
2. Check who has issued the notice. Confirm the rank, and the order under section 120 or section 127 giving that authority jurisdiction on the dates of the notice and of the order (Divine Light Finance). For a Transfer Pricing Officer’s order, check that the authority is the one assigned transfer pricing. If a higher rank is revising a matter outside a decided appeal, take the point on Explanation 1(c).
3. Compute limitation first. Two years from the end of the financial year in which the order sought to be revised was passed (section 263(2)); for a Transfer Pricing Officer’s order, his order. Section 263 has no sixty-day floor, and in our view section 377(7) does not supply one for a revision under the 1961 Act. The detailed rules are in Part 2.
4. In a search case, classify each year. Was the assessment pending on the date of the search (abated) or completed, and does any seized material relate to that year? For an unabated year with none, take the ground that the Assessing Officer could not have made the addition (Abhisar Buildwell; Software Consultants).
5. Get the approval file. Ask in writing, and where necessary under the Right to Information Act, for the approval under section 153D, section 148B or section 158BG, the draft order and the forwarding note. Note the date of the approval: before 1 April 2021 it is outside section 292BC. Use the file to show where the issue in the notice was before the approving officer; a bare approval covering many years will not carry that argument.
6. Decide how the approval is to be pleaded. Lead with the ordinary grounds and the approval record. Take the bar as a subsidiary ground where the approval predates 1 April 2021 or the forum follows Prakhar Developers or the Tribunal line; for a later approval add that section 292BC does not bear on section 263 and keep the challenge to its validity open. Do not plead in the quantum appeal that the approval was a mechanical nullity without recognising that it undercuts reliance on the same approval in the revision (Kapil Mehta, para 6.0, where both were taken in the same appeal).
7. Consider the nullity ground with care. If the assessment has a defect of jurisdiction not cured by sections 292B, 292BB, 292BA, 292BC or 124(3), raise it in the reply and in the appeal by a specific ground (Westlife; P.V. Doshi), after checking that no ground in any other proceeding depends on the assessment being valid.
8. Build the inquiry record. The reply to a no-inquiry notice is the record: the notices under section 142(1), the replies, the order sheet, the statements, and in a search case the questions put on the seized material (Brahambhatt). Part 1 has the detail.
9. File the appeal under section 253(1)(c) within time. Two months from the end of the month in which the order is communicated. State the correct clause in the form, and deal with the fee under section 253(6).
10. Apply for stay of the fresh assessment. Apply to the Tribunal under section 254(1) and the first proviso to section 254(2A), on the authority of The Commissioner of Income Tax (Central-II) and Mohammed Kunhi, and ask the Assessing Officer in writing to keep the proceedings in abeyance (Sarjan records such a request). If the Tribunal declines for want of power, the Madras orders show what a writ court may do.
11. Take part in the fresh assessment and appeal it. Object to anything beyond the items in the revision order (Dosani) and, in a search case, to a fresh order passed without approval (Osho Forge is against that objection). Appeal the fresh order to the Commissioner (Appeals) within time, rely there on the quashing of the revision when it comes (Sarjan; Bombay Dyeing), and apply under section 220(6) for the demand.
12. Protect the original appeal. If an appeal against the original assessment is pending, object to its dismissal as infructuous, or ask for its restoration when the revision is set aside.
13. Keep section 264 in view. If the order contains an error against the assessee that is not under appeal, the year under section 264(3) runs from communication of the order, whatever the Department does under section 263.

Concordance: Income-tax Act, 1961 and Income-tax Act, 2025

This is the concordance for the three Parts.

Subject	Income-tax Act, 1961	Income-tax Act, 2025	What changed
Power to revise	Section 263(1)	Section 377(1)	Exercised by the “Competent Authority”; clauses (i) to (iii) become (a) to (c); section 92CA becomes section 166
Orders included	Explanation 1(a)	Section 377(2)(a)	Operative text; “For the removal of doubts” and “on or before or after the 1st day of June, 1988” dropped; section 144A becomes section 272; section 120 becomes section 241
Meaning of “record”	Explanation 1(b)	Section 377(2)(b)	“shall be deemed always to have included” dropped; “Competent Authority”
Matters not considered and decided in appeal	Explanation 1(c)	Section 377(2)(c)	“the powers of the Competent Authority” in place of “the powers of the Principal Commissioner or Commissioner”; date words and “deemed always to have extended” dropped
Deemed error	Explanation 2	Section 377(3)	Operative text; “it is hereby declared” dropped; “or” after each of clauses (a), (b) and (c); section 119 becomes section 239
Transfer Pricing Officer	Explanation 3	Section 377(8)(b)	Defined by section 166(17)
Two-year limit	Section 263(2)	Section 377(4)	No change
Orders giving effect to findings or directions	Section 263(3)	Section 377(5)	“Irrespective of” in place of “Notwithstanding”
Exclusions	Explanation below section 263(3)	Section 377(6)	Rehearing under section 244(2) in place of the proviso to section 129; stay exclusion in the same terms
Sixty-day floor after exclusions	None	Section 377(7)	New
Who exercises the power	Four ranks named in section 263(1)	Section 377(8)(a)	Defined term “Competent Authority”
Revision in the assessee’s favour	Section 264	Section 378	“Competent Authority”; condonation moved to sub-section (4); bars in sub-section (5); fee in (6); time for the order in (7); exclusions in (8); sixty-day floor added in (9); finding or direction in (10)
Faceless revision and effect	Sections 264A and 264B	Section 532	One general scheme power, no cut-off date; earlier schemes carried over by section 536(2)(u)
Appeal against a revision order	Section 253(1)(c)(i) and (ii)	Section 362(1)(b)(ii) and section 362(1)(c)	Section 377 in place of section 263
Time, condonation, fee, fee on an application for stay of demand	Section 253(3), (5), (6) and (7)	Section 362(3), (5), (6) and (8)	No change of substance
Orders of the Tribunal	Section 254(1)	Section 363(1)	No change of substance
Stay by the Tribunal	First to third provisos to section 254(2A)	Section 363(6), (7) and (8)	Provisos become sub-sections; no change of substance
Tribunal’s order sent electronically	Section 254(3A)	Section 363(10)	Both inserted or substituted by the Finance Act, 2026
Rectification of the revision order	Section 154	Section 287	Named in section 362(1)(b)(iii) and (c)
Fresh assessment after revision	Section 153(3)	Section 286(1), Table, Sl. No. 5	One year from the end of the financial year in which the section 377 order is passed
Effect otherwise than by fresh assessment	Section 153(5) with its provisos	Section 286(1), Table, Sl. Nos. 9 and 10	Six months, extendable to nine, in place of three months with a further six; where verification or a hearing is needed, one year from the end of the month of the order in place of the time in section 153(3)
Effect to the Transfer Pricing Officer’s order after revision	Section 153(5A)	Section 286(1), Table, Sl. No. 11	Two months, unchanged
Finding or direction	Section 153(6)(i)	Section 286(1), Table, Sl. No. 8	One year from the end of the month in which the order is received or passed
Sixty-day floor for assessment	First proviso after Explanation 1 to section 153	Section 286(4)	In the body of the section
Rehearing on change of incumbent	Proviso to section 129	Section 244(2)	No change of substance
Transfer Pricing Officer’s order	Section 92CA	Section 166; order under section 166(6); definition in section 166(17)	Renumbered
Approval of an assessment under section 153A or 153C	Section 153D	No direct counterpart; approval of the block order is in section 299(2)	Sections 153A and 153C have no counterpart
Authority and approval for the block order	Section 158BG	Section 299	Approval for searches on or after commencement of the 2025 Act
Approvals deemed administrative and supervisory	Section 292BC	Section 522(3)	No override of judgments; no “for the removal of doubts”; from 1 April 2026
Assessment not invalid for mistake, defect or omission	Section 292B	Section 522(1)	Combined with the provisions on the Document Identification Number and approvals
Defect in quoting the Document Identification Number	Section 292BA	Section 522(2)	No override of judgments; no “for the removal of doubts”
Notice deemed served	Section 292BB	Section 523	Proviso becomes sub-section (2)
Directions of the Joint Commissioner	Section 144A	Section 272	As referred to in section 377(2)(a)(i)
Instructions of the Board	Section 119	Section 239	As referred to in section 377(3)(c)
Repeal and savings	None	Section 536(2)(c), (e), (k), (u), (v) and section 536(4)	The 1961 Act continues for tax years beginning before 1 April 2026 (a block assessment under the 2025 Act apart; question 13) and for searches initiated before that date

Decisions referred to in this Part

Decision	Court and date	Cited for
Rajesh Balvantrai Brahambhatt	Gujarat High Court, 7 September 2026	Revision of approved search assessments quashed on inquiry made; approval not decided
Abhisar Buildwell P. Ltd.	Supreme Court, 24 April 2023	No addition in a completed year without incriminating material; reassessment “the only remedy” for such a year
Software Consultants	Delhi High Court, 17 January 2012	Order not erroneous for omitting an addition the Assessing Officer could not make
M/s. Venezia Golf City Pvt Ltd	ITAT Delhi, 19 September 2025	Approval must be examined and vitiated; reproduces a co-ordinate Bench order on unabated years
Shyam Sel and Power Limited	Calcutta High Court, 7 May 2026	Abated year: revising authority’s power as wide as the Assessing Officer’s
Meenamani Ganga Builder LLP	ITAT Pune, 21 April 2025	Approval does not cover an issue the draft order did not deal with; year of search
Prakhar Developers Private Limited	Madhya Pradesh High Court at Indore, 1 April 2024	Approval under section 153D held to bar revision; admission stage, unopposed
R. Srinivasan	Madras High Court, 11 September 2012	Block order approved by the Commissioner not revisable by an officer of the same rank
Shri Ramamoorthy Vasudevan	ITAT Pune, 29 November 2018	Revision of an approved order held unsustainable
Sandeep Singh	ITAT Amritsar, 15 September 2026	Approval must first be found erroneous; defective assessment not revisable; section 264 ground not decided
Kapil Mehta	ITAT Delhi, 11 October 2021	No fetter on revision of an approved order; contradictory grounds on approval
T.N. Civil Supplies Corporation Ltd.	Supreme Court, 16 January 2003	Orders passed on a superior’s directions are within section 263
Mehsana District Co-op. Milk Producers	Gujarat High Court, 2 April 2003	T.N. Civil Supplies applied to an order made on directions under the former section 144B
JMC Projects (India) Limited	Gujarat High Court, 21 December 2015	Argument from consultation with higher authorities raised and not dealt with
M/s Osho Forge Ltd.	Punjab and Haryana High Court, 27 April 2018	No fresh approval under section 153D for the order after revision
Nikhil Nagindas Modi	Bombay High Court, 5 August 2026	Section 292BC does not reach an approval of 30 March 2021; validity left open
Joseph Chacko	Karnataka High Court, 16 April 2026	Matter remitted for section 292BC to be pleaded
Clarion Agro Products Private Limited	ITAT Hyderabad, 8 July 2026	Section 292BC applied to an approval under section 153D
M/s Westlife Development Ltd	ITAT Mumbai, June 2016	Nullity of the assessment as a defence to revision; original demand preserved
WSP Consultants India Private Ltd.	ITAT Delhi, 27 March 2024	Assessment after remand passed without a draft order under section 144C void and not open to revision
Kiran Singh v. Chaman Paswan	Supreme Court, as quoted in The Commissioner of Income Tax (Central-II)	Invalidity of an order without jurisdiction can be set up in collateral proceedings
The Commissioner of Income Tax (Central-II) v. Income Tax Appellate Tribunal & Ors.	Delhi High Court, 3 August 2012	Jurisdictional plea not barred by consent or waiver; Tribunal’s power to stay the consequential assessment
Divine Light Finance Ltd.	Calcutta High Court, 3 July 2024	Revision by a Commissioner without jurisdiction is a nullity; section 124(3) inapplicable; plea raised in the consequential appeal
P.V. Doshi	Gujarat High Court, 3 August 1977	Jurisdiction cannot be waived; no finality for an order without jurisdiction
Essar Steel Limited	ITAT Mumbai, 31 October 2012	Assessment conforming to the Transfer Pricing Officer’s order not erroneous; observation that the Commissioner has no administrative jurisdiction over him
Tata Communications Limited	ITAT Mumbai, 20 December 2013	Transfer Pricing Officer’s order not revisable by the Commissioner
Swiss Singapore India P. Ltd.	ITAT Rajkot, 21 May 2024	Amendment of 2022 clarificatory; earlier order revisable
The Bombay Dyeing and Manufacturing Co. Ltd.	Bombay High Court, 28 August 2026	Consequential order (passed “by the NFAC, Delhi”) without a subsisting revision order
Jagadhri Electric Supply & Industrial Co.	Punjab and Haryana High Court, 17 March 1981	Tribunal cannot uphold the revision on another ground
M.K. Mohammed Kunhi	Supreme Court, 11 September 1968	Tribunal’s incidental power to grant stay
VIP Housing and Properties	Madras High Court, 31 March 2022	Tribunal rejected the stay application for want of power; assessment to proceed, demand barred
Mahasakthi Bio Enercon Private Limited	Madras High Court, 24 April 2025	VIP Housing followed after the consequential order; no effect to be given pending the appeal against the revision
Sabarkantha District Co-op. Purchase and Sales Union Ltd.	Gujarat High Court, 10 September 2018	Consequential order does not survive the revision
Sarjan Cooperative Housing Society Ltd.	Gujarat High Court, 22 August 2023	Same, though the Revenue’s appeal was pending; fresh exercise if the Revenue succeeds
M/s Elecon EPC Projects Ltd	Gujarat High Court, 2 September 2023	Follows Sarjan
Malabar Institute of Medical Sciences Ltd.	Kerala High Court, 17 March 2025	Fresh assessment after an open remand appealable on merits without appealing the revision
D.N. Dosani	Gujarat High Court, 5 October 2005	Fresh assessment confined to the items in the revision
Essar Steel India Ltd.	ITAT Mumbai, 30 April 2013	Appeal against the original assessment restored when the revision was cancelled
Ritz Ltd. and another	Bombay High Court, 23 March 1990	The earlier view that the whole assessment merges in the appellate order
Shri Arbuda Mills Ltd.	Supreme Court, 23 January 1996	Explanation 1(c) applied to items not carried in appeal
M/s. Amritlal Bhogilal & Co.	Supreme Court, 28 April 1958	Order of registration, not being the subject of the appeal, did not merge; revisional power determined by the terms of the section

The power itself, the twin test, inquiry and Explanation 2 are in Part 1, with open questions 1 to 4: Section 263 revision: the twin test, inquiry and Explanation 2. The record, merger, limitation, the notice, the form of the order and the choice between revision and reassessment are in Part 2, with open questions 5 to 9: Section 263 revision: merger, limitation, notice and the set-aside. Questions 10 to 14, on approval, section 292BC, void orders, the two-rank wording and the transition, and the Transfer Pricing Officer’s order, are in this Part.

This note is general commentary on the law as at 11 November 2026 and is not advice on any matter. The position in a particular case depends on its own facts.