s.264 — Revision in the assessee's favour

Currently operative

Sub-section (4) was amended by the Finance Act 2023 with effect from 1 April 2023, which substituted "the Joint Commissioner (Appeals) or the Commissioner (Appeals)" for "the Commissioner (Appeals)" wherever occurring in it. The Department serves several consolidated editions of this section at different addresses; the most recent traced carries Year 2021 and so does not show that amendment, and the text here follows the Finance Act 2023 as enacted. The reference to the National Tax Tribunal in sub-section (7) has never taken effect.

Income-tax Act, 1961

s.264

Income-tax Act, 2025

s.378

In force from 1 April 2026, but s.536(2)(c) preserves the 1961 Act for tax years beginning before that date.

In short

Section 264 of the Income-tax Act, 1961 allows the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner, either of his own motion or on an application by the assessee, to call for the record of any proceeding in which an order has been passed by an authority subordinate to him, other than an order to which section 263 applies, and to pass such order as he thinks fit, not being an order prejudicial to the assessee. The suo motu power lapses one year after the order under sub-section (2). An application by the assessee must be made within one year of communication of the order or of his otherwise coming to know of it, whichever is earlier, under sub-section (3), and the proviso to that sub-section allows a late application where sufficient cause prevented a timely one. Sub-section (4) carries three bars, which keep appeal and revision from running together. Sub-section (5) requires a fee of five hundred rupees. Sub-section (6) requires an order on the assessee's application within one year from the end of the financial year in which it was made, and sub-section (7) lifts that period where the order gives effect to a finding or direction of the Appellate Tribunal, the High Court or the Supreme Court. Section 264 does not appear in the list of appealable orders in section 246A(1) and no appeal lies to the Tribunal, so the only remedy against a revisional order is a writ petition. The Supreme Court has now held, in DCIT v. Om Siddhakala Associates on 5 August 2026 and in Orissa Rural Housing Development Corporation Ltd. v. ACIT on 8 October 2026, that a claim which would have required a revised return under section 139(5) cannot be made in a revision under this section once that time has gone. The corresponding provision in the Income-tax Act, 2025 is section 378, which re-enacts the scheme with the sub-sections renumbered, puts the condonation power in a sub-section of its own, states expressly in sub-section (11)(b) that an order declining to interfere is not an order prejudicial to the assessee, and adds in sub-section (9) a floor extending to sixty days whatever is left of the disposal period after an exclusion, which the 1961 provision does not carry.

What the provision does

Confers a one-sided revisional power that can only help the assessee, against any order of a subordinate authority that is not within section 263, where no appeal is available or the right of appeal has lapsed or been waived. It is the route for an error by the Assessing Officer, for an intimation under section 143(1), and for a legal point on material already before him. It is not a route for a claim that needed a revised return, and it carries no stay of demand.

Threshold questions

Is the thing challenged an order at all, or only a letter, a notice or an internal communication
Does section 263 apply to it, in which case section 264 does not
Is the one-year period in sub-section (3) running from communication or from knowledge, and is the order under section 154 the better peg than the earlier assessment order
Does an appeal lie and is the time still open, which bars revision under clause (a) unless the right of appeal is waived in writing
Has the order already been made the subject of an appeal, which bars revision under clause (c)
Would the relief sought have required a revised return under section 139(5), and has that time gone
Has the five hundred rupee fee been paid, and is a waiver of the right of appeal on the record

The recurring disputes.

The fresh claim bar, and the two tests inside the same order

The Supreme Court has held that a claim requiring a revised return cannot be routed through revision once the section 139(5) time has gone. The same order says that the revisional power is for entertaining for the first time a new question of law on the facts available with the assessing authority. The first formulation is claim-centred and the second is facts-centred, and they do not sit easily together, because in both decided cases the facts were on the record and relief was still refused. How far relief survives where the facts were disclosed but the claim was not made is contested and not yet resolved.

Whether the Commissioner's own one-year period is mandatory

Sub-section (6) is expressed as a requirement but states no consequence for breach. A deemed allowance would be a striking consequence to read in and abatement would be a striking injustice, and no decision resolving it was traced. The practical answer does not depend on the question: put a written reminder on the record before the period expires and, if it passes without an order, seek a mandamus to compel a decision.

How far merger under clause (c) goes

The orthodox position is that an assessment merges into an appellate order only to the extent of what was considered and decided, so an issue never raised does not merge and a revision could still lie on it. The counter-argument is that clause (c) is framed around the order having been made the subject of an appeal and not around the issue, and reads as a complete bar once an appeal has been filed. The position of an appeal filed and later withdrawn, or dismissed in limine or for delay, is arguable both ways on the same words.

Whether an intimation under section 143(1) is an order

The High Court authority that it is rests on the width of the words "any order", on Article 265 and on the Board's own direction that an officer should not take advantage of an assessee's ignorance. The Department's answer is that the Explanation to section 143 which deemed an intimation to be an order for the purposes of sections 246 and 264 was omitted with effect from 1 June 1999, so Parliament removed the deeming deliberately. The point should be anticipated, not discovered at the hearing.

Frequently asked.

Can section 264 be used to make a claim left out of the return?

Not where making the claim would have required a revised return and the time for one has gone. That is the effect of the Supreme Court's decisions of 5 August 2026 and 8 October 2026. Check first whether section 139(5) is still open, which it is only until 31 December of the assessment year, and if it has closed look at an application under section 119(2)(b) for condonation of delay in making the claim.

What is the difference between section 263 and section 264?

Section 263 is for the revenue and section 264 is for the assessee. Section 263 reaches an order erroneous in so far as it is prejudicial to the interests of the revenue, runs for two years from the end of the financial year in which that order was passed, and produces an order appealable to the Tribunal. Section 264 forbids any order prejudicial to the assessee, runs for one year which can be condoned for sufficient cause, and produces an order against which no appeal lies at all.

Is a revision under section 264 appealable?

No. Section 264 does not appear among the appealable orders in section 246A(1) and section 253 gives no appeal to the Tribunal against it. The only remedy is a writ petition, which is why the election between appeal and revision should be made deliberately and early.

Does a pending revision stop recovery of the demand?

No. Section 220(6), which permits the Assessing Officer to treat an assessee as not in default, is framed around a pending appeal and not a pending revision. Recovery, adjustment of refunds under section 245 and interest under section 220(2) all continue while the Commissioner's own one-year period runs. This should be explained to a client before any right of appeal is waived.