“erroneous and prejudicial”

Rectification & RevisionSection 263Section 2633,136 judgments

The decision most relied on for erroneous and prejudicial is Malabar Industrial Co. Ltd. v. CIT (243 ITR 83), cited in 2,943 judgments on BharatTax.

Leading authorities on erroneous and prejudicial

Malabar Industrial Co. Ltd. v. CIT

243 ITR 83 · 2000 · Supreme Court

2,943

citing judgments

For revision under Section 263, the Assessing Officer's order must be both erroneous and prejudicial to the interests of the revenue; if either condition is not met, the revisionary jurisdiction cannot be invoked. An order is not erroneous merely because the Assessing Officer did not record the details of enquiries conducted, provided due enquiries were made.

CIT v. Max India Ltd.

295 ITR 282 · 2007 · Supreme Court

1,162

citing judgments

Under Section 263, an assessment order is not erroneous and prejudicial to the interest of the revenue merely because the Principal Commissioner disagrees with the Assessing Officer's (AO) view, particularly if the AO has adopted one of two permissible views in law, unless that view is completely unsustainable. If due inquiries were made, the AO's order does not become erroneous solely because the fact of inquiries was not recorded.

CIT v. Gabriel India Ltd.

203 ITR 108 · 1993 · High Court

990

citing judgments

The Commissioner cannot revise an assessment order under Section 263 merely because they hold a different opinion or believe a deeper inquiry was warranted if the Assessing Officer has applied their mind and conducted some inquiry. Revision under Section 263 is permissible only in cases of a complete lack of inquiry or non-application of mind by the Assessing Officer, not for merely inadequate inquiry.

CIT v. Sunbeam Auto Ltd.

332 ITR 167 · 2011 · High Court

897

citing judgments

The Commissioner cannot revise an assessment under Section 263 merely because the assessment order does not explicitly reflect an inquiry, or because the Commissioner holds a different opinion. An inquiry, even if considered inadequate, or an assessment based on a plausible view by the Assessing Officer after due examination, does not automatically make the order erroneous or prejudicial to the interests of the revenue.

Rampyari Devi Saraogi v. CIT

67 ITR 84 · 1968 · Supreme Court

616

citing judgments

An assessment order is erroneous and prejudicial to the Revenue's interests if the Assessing Officer accepts a sum offered as income by an assessee, even when that sum was not actually earned, thereby allowing revision under Section 263.

Gee Vee Enterprises v. Addl. CIT

99 ITR 375 · 1975 · High Court

543

citing judgments

An assessment order is erroneous and prejudicial to the interest of revenue if the Assessing Officer fails to make proper inquiries before accepting the assessee's statements or claims. The Commissioner can revise such an order under Section 263 without conducting further inquiries himself.

ITO v. D.G. Housing Projects Ltd.

343 ITR 329 · 2012 · High Court

438

citing judgments

For exercising revisional jurisdiction under Section 263, the Commissioner must first find that the Assessing Officer's order is erroneous and unsustainable in law, as this is a condition precedent. An order is not erroneous merely because two views are possible, or if the Commissioner disagrees with the Assessing Officer's permissible view, or to simply remit the matter for further enquiries.

CIT v. Vikas Polymers

341 ITR 537 · 2012 · High Court

318

citing judgments

An assessment order is not erroneous and prejudicial under Section 263 merely because the Assessing Officer did not record an enquiry and its satisfactory answer in the assessment order, provided such an enquiry was conducted. For revision under Section 263, the Commissioner must also provide the assessee an opportunity of being heard and examine their explanation.

Judgments citing erroneous and prejudicial

Gujarat Metro Rail Corporation (Gmrc) Limited, Gandhinagar vs. The Pr. CIT, Ahmedabad-3, Ahmedabad

In the result, the appeal filed by the assessee is hereby allowed

ITA 397/AHD/2023[2018-19]Status: DisposedITAT Ahmedabad06 Mar 2024AY 2018-19

Bench: Shri Waseem Ahmed & Shri T R Senthil Kumarआयकरअपीलसं./Ita No. 397/Ahd/2023 धििाधरणवरध/Asstt. Year: 2018-2019 Gujarat Metro Rail Corporation Principal Commissioner Of (Gmrc) Limited, Vs. Income Tax, Block No.1, Ahmedabad-3, First Floor, Ahmedabad. Kar,Yogi Bhavan, Sector 10A, Gandhinagar-382010. Pan: Aagcm3807M

For Appellant: Shri SN Soparkar, Sr. Advocate with Shri Parin Shah, ARFor Respondent: Dr. Darsi Suman Ratnam, CIT.D.R

Section 143(3)Section 263

discussion I am, therefore, of the opinion that the assessment order passed by the AO u/s.143(3) of the Act dated 25.03.2021 is erroneous and prejudicial to the interest of the revenue. By virtue of the powers vested in me u/ s. 263 of the IT Act, I hereby

Shree Alekh, Bhavnagar vs. PCIT Ahmedabad-1, Ahmedabad

In the result, appeal filed by the assessee is allowed

ITA 91/AHD/2022[2017-18]Status: HeardITAT Ahmedabad06 Mar 2024AY 2017-18

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedassessment Year: 2017-18

Section 133ASection 143(3)Section 263Section 40A(3)

investigating the issue, merely directed the AO to frame the assessment order afresh. Without there being any positive finding about order being erroneous and prejudicial to the interest of the revenue, the action of Id. PCIT is without jurisdiction and illegal. 6. Ld. PCIT has erred in not considering various ... Assessing Officer, after taking cognisance of the assessee’s submissions and the details, has passed reasoned order and the said order is neither erroneous nor prejudicial to the interest of Revenue and hence twin conditions for invoking jurisdiction under Section 263 of the Act are not satisfied

Vadodara Gas Limited, Vadodara vs. The Pr. CIT-1, Vadodara

In the result, the appeal of the assessee is allowed

ITA 203/AHD/2022[2017-18]Status: DisposedITAT Ahmedabad06 Mar 2024AY 2017-18

Bench: Ms. Suchitra Kamble (Judicial Member), Shri Waseem Ahmed (Accountant Member)

For Appellant: Shri Milan Mehta, A.RFor Respondent: Shri Durga Dutt, CIT-D.R

Section 115JSection 143(3)Section 263

learned PCIT erred in law and in fact in holding that the order passed by the Assessing Officer u/s. 143(3) is erroneous and prejudicial to the interest of revenue despite the fact that the order passed by the learned AO was after due verification of the issue and that ... submitted that the CIT(A) has not made out the case as to how the assessment order is erroneous or prejudicial to the interest of Revenue. 6. The ld. D.R. submitted that the assessee at the time of assessment proceedings has not given any details as to the shortage

Britannia Industries Ltd, Kolkata vs. DCIT, Cir-7(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 462/KOL/2023[2018-19]Status: DisposedITAT Kolkata06 Mar 2024AY 2018-19

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma

Section 139(1)Section 143(3)Section 263Section 35(1)(i)Section 43BSection 56(2)(x)Section 80J

paper book annexing several documents/evidences in support of its averments and contentions that the order passed by the ld. Assessing Officer is neither erroneous nor prejudicial to the interest of the revenue and, therefore, the impugned show-cause notice deserved to be dropped summarily. The ld. PCIT after taking into ... relate to the issues as mentioned in Clause Nos. (II), (IV) & (V)above and Ld. PCIT, however, held the assessment order to be erroneous and prejudicial to the interests 3 Britannia Industries Limited of the revenue so far as it relates to the issues as set out in Clause

Chandrani Compliments & Export (P) Ltd., Kolkata vs. D.C.I.T., Circle-10(1), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 2365/KOL/2019[2012-13]Status: DisposedITAT Kolkata06 Mar 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. No.2365/Kol/2019 Assessment Year : 2012-13 Chandrani Compliments & Export (P) Ltd..........…...……………....Appellant 1, Tarpan Ghat Road, Kolkata – 700053. [Pan: Aabcc3652J] Vs. Dcit, Circle-10(1), Kolkata……..........................................…..…..... Respondent Appearances By: Shri C. Roy, Ar, Appeared On Behalf Of The Appellant. Shri Abhijit Kundu, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : February 05, 2024 Date Of Pronouncing The Order : March 06, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Revision Order Dated 14.03.2019 Of The Principal Commissioner Of Income Tax-4, Kolkata [Hereinafter Referred To As ‘Pcit’] Passed U/S 263 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Contested The Very Validity Of The Revision Order Passed By The Ld. Pcit. 3. At The Outset, The Ld. Counsel For The Assessee Has Stated The Chronological Events By Stating That The Return For The Assessment Year Under Consideration I.E. A.Y 2012-13 Was Filed By The Assessee On 01.10.2012 Showing An Income Of Rs.67,5,030/-. Thereafter, The Scrutiny Assessment Was Completed On 19.12.2014 By The Ld. Dcit, Circle-10(1), Kolkata U/S 143(3) Of The Act, Wherein, The Income Of The

Section 143(3)Section 201Section 263Section 36(1)(va)Section 68

exercised his revision jurisdiction u/s 263 of the Act and passed revision order dated 13.06.2016 observing that the assessment order dated 19.12.2014 was erroneous and prejudicial to the interest of Revenue for want of proper enquiries on the part of the Assessing Officer while framing the assessment on various issues ... income, in pursuance to the revision order passed, was less than the income assessed earlier, therefore, the said assessment order dated 17.01.2017 was erroneous and prejudicial to the interest of Revenue. 6. After receiving the proposal from the from the concerned DCIT, the then ld. PCIT-4, Kolkata again exercised

Sh. Pardeep Kumar, Ambala vs. Principal Commissioner of Income Tax, Panchkula

In the result, the appeal of the assessee is allowed

ITA 72/CHANDI/2022[2011-12]Status: DisposedITAT Chandigarh04 Mar 2024AY 2011-12

Bench: SHRI. AAKASH DEEP JAIN (Vice President), SHRI. VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Sudhir Sehgal, Advocate and Shri Rishabh Marwah, C.AFor Respondent: Smt. Kusum, CIT, DR

Section 142(1)Section 143(2)Section 147Section 263

cancelling the earlier assessment as passed by the Assessing Officer, Ward-3, Ambala vide order, dated 15.12.2018 and holding the same as erroneous and prejudicial to the interest of revenue. 2. That the PCIT has failed to appreciate the fact that the assessment was completed by the Ld. Assessing Officer ... under the head “short term capital gain”. In view of the facts discussed above, it was submitted that the assessment order is erroneous and prejudicial to the interest of Revenue. She accordingly supported the order and the findings of the Ld. Pr. CIT. 14. We have heard the rival contentions

M/S Din Dayal Pursotam Lal, Sirsa vs. Pr.CIT, Rohtak

ITA 148/CHANDI/2021[2016-17]Status: DisposedITAT Chandigarh04 Mar 2024AY 2016-17

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Gautam Jain, Advocate &For Respondent: Shri Rohit Sharma, CIT-DR

Section 147Section 263Section 40A(3)

Section 40A(3) of the Act; that hence, it was a clear case of lack of enquiry and, therefore, the assessment order was erroneous and prejudicial to the interests of the Revenue; that the AO should conduct detailed enquiries on the said issues, on the basis of documentary evidences; that ... examination of the facts on record and after making possible enquiries, due to which the assessment order could not be termed as either erroneous or prejudicial to the interests of the Revenue; that it was only because the ld. PCIT had an opinion different from that held

M/S Din Dayal Pursotam Lal, Sirsa vs. Pr.CIT, Rohtak

ITA 147/CHANDI/2021[2015-16]Status: DisposedITAT Chandigarh04 Mar 2024AY 2015-16

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Gautam Jain, Advocate &For Respondent: Shri Rohit Sharma, CIT-DR

Section 147Section 263Section 40A(3)

M/S Din Dayal Pursotam Lal, Sirsa vs. Pr.CIT, Rohtak

ITA 146/CHANDI/2021[2011-12]Status: DisposedITAT Chandigarh04 Mar 2024AY 2011-12

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Gautam Jain, Advocate &For Respondent: Shri Rohit Sharma, CIT-DR

Section 147Section 263Section 40A(3)

Associated Soapstone Distributing Co Private Limited, Jaipur vs. Principal Commissioner of Income Tax -2, Jaipur

In the result, the appeal filed by the assessee is allowed as indicated

ITA 243/JPR/2023[2018-19]Status: DisposedITAT Jaipur04 Mar 2024AY 2018-19

For Appellant: Shri Rohan Sogani, CAFor Respondent: Shri Arvind Kumar, CIT-DR

Section 139(1)Section 143(2)Section 143(3)Section 14ASection 263Section 36(1)(ii)Section 37Section 43B

case and in law, the ld. PCIT has erred in assuming jurisdiction u/s 263 when the order of the AO is neither erroneous nor prejudicial to the interest of the Revenue. The action of the Id. PCIT is illegal, unjustified, arbitrary and against the facts of the case. Relief ... assessment order passed by NeAC on 17.03.2021may not be revised u/s 263 and may not be treated as erroneous and prejudicial to the interest of the revenue. 4. In response, the assessee filed replies on various dates i.e 22.02.2023 & 28.03.2023 the gist of the reply is as under

Eastern Drug & Sanitary Product, Meerut vs. Pr, CIT, Ghaziabad

In the result, the appeal of the assessee is allowed

ITA 1110/DEL/2022[2012-13]Status: DisposedITAT Delhi04 Mar 2024AY 2012-13

Bench: Shri Amit Shukla & Shri M. Balaganesh[Assessment Year: 2012-13]

Section 143(3)Section 147Section 148Section 263Section 40

31/03/2011 and 31/03/2012 respectively. 3. In view of the above, the assessment order passed by the AO, Circle-1, Meerut is erroneous and prejudicial to the interest of revenue and may be cancelled or modified by invoking the provisions of section 263 of the Income Tax Act, 1961." 9. Thereafter ... supporting evidence furnished during assessment proceedings. 3. In view of the above, the assessment order passed by the AO, Circle-1, Meerut is erroneous and prejudicial to the interest of revenue and may be cancelled or modified by invoking the provisions of section 263 of the Income

Vighnahartha Trust, Mumbai vs. Dy. CIT (Exemption) Circle 2, Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 3324/MUM/2023[2011-12]Status: DisposedITAT Mumbai01 Mar 2024AY 2011-12

Bench: Shri Pavan Kumar Gadale & Shri S Rifiaur Rahmanvighnahartha Trust, Vs. Dcit(Exemp)C-2, 1605/1606, Hurrah Cumballa Hill, Building City Of Joy, Mntl Te Building, Mulund West, Pedder Road, Mumbai-400080. Dr G.D Marg, Mumbai- 400026. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaatv8040K Appellant .. Respondent Assessee By : Shri Rajeev Khandelwal.Ar Revenue By : Shri Ujjwalkumarchavhan.Sr.Dr Date Of Hearing 06.02.2024 Date Of Pronouncement 01.03.2024 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Appeal Is Filed By The Assessee Against The Order Of The National Faceless Appeal Centre (Nfac) – Delhi / Cit(A) U/S 271B & 250 Of The Act. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Shri Rajeev Khandelwal.ARFor Respondent: Shri UjjwalkumarChavhan.Sr.DR

Section 12ASection 143(3)Section 147Section 148Section 2(13)Section 263Section 271BSection 273BSection 44A

dated 14.12.2018. Subsequently the Pr.CIT on perusal of the records and information Vighnahartha, Mumbai. found that the order passed by the AO is erroneous and prejudicial to the interest of revenue and passed revision order u/sec 263 of the Act dated 22-03-2021. Further as per the directions issued