Section 378 of the Income-tax Act, 2025 — Revision of Other Orders in Favour of the Assessee (Successor to Section 264)

In plain language

What Section 378 is all about

Section 378 of the Income-tax Act, 2025 is the taxpayer-friendly revision provision. It lets a senior income-tax authority correct an order passed by a junior officer when that order has wrongly gone against the taxpayer. It is the direct successor to the well-known Section 264 of the Income-tax Act, 1961, and carries the same DNA: it is a remedy that can only help the assessee, never harm them.

The single most important rule is this: any order passed under Section 378 cannot be prejudicial to the assessee. The authority can reduce your tax, allow a claim you missed, correct a computation, or grant a refund — but it can never enhance your assessment or increase your liability. That makes it a safe door to knock on.

Who can revise, and which orders

• Competent Authority: the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner — a senior officer above the Assessing Officer.
• Which orders: "any order" passed by a subordinate authority, except orders that fall under Section 377 (the revenue-protective revision provision, successor to Section 263).
• How it starts: either the authority acts on its own motion (suo motu), or — far more commonly — the taxpayer files a revision application.

Time limits you must watch

• Assessee's application: file within one year from the date the order was communicated to you, or the date you otherwise came to know of it — whichever is earlier.
• Condonation of delay: the authority may condone a late application if satisfied you were prevented by sufficient cause.
• Suo motu revision: the authority cannot revise an order on its own motion if that order is more than one year old.
• Disposal deadline: an order on the assessee's application must generally be passed within one year from the end of the financial year in which the application was made (certain periods, such as court stays, are excluded).

Key conditions and restrictions

Section 378 is not a parallel appeal route. You cannot use it while the appeal route is open or in use. Revision is barred where:

• an appeal lies to the Joint Commissioner (Appeals), Commissioner (Appeals) or the Appellate Tribunal but has not been filed, and the time to appeal has not expired; or
• you have not waived your right of appeal; or
• the order has already been made the subject of an appeal.

In short, you must choose one lane. If you have appealed, you cannot also seek revision on the same issue. A common practical step is to waive the right of appeal and then apply under Section 378 when appeal is not the better tactic.

Fee and exception for higher-court directions

• Fee: every revision application by an assessee must be accompanied by a fee of ₹500.
• Special exception: an order may be revised at any time (ignoring the normal time limits) to give effect to a finding or direction of the Appellate Tribunal, High Court or Supreme Court.

How it interacts with related sections

Section 378 sits in Chapter XVIII (Appeals, Revisions and Alternate Dispute Resolution) alongside Section 377 (revision by the Commissioner of orders prejudicial to revenue — pro-department) and the appeal sections. Section 377 can go against you; Section 378 can only favour you. They are two sides of the revisional coin.

Practical implications

Section 378 is most valuable for relief-focused, document-backed corrections: a deduction you forgot to claim, a TDS credit not given, income taxed twice or in the wrong year, an arithmetical or apportionment error, or a refund wrongly denied. It is a low-cost (₹500), low-risk route because the outcome can only be neutral or favourable. However, it is discretionary — the authority is not bound to allow relief — and it cannot be used to reopen a matter you have already taken to appeal.