“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

Arif Industries Pvt.Ltd., Lucknow vs. CIT(A), Lucknow

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 638/LKW/2024[2022-23]Status: DisposedITAT Lucknow28 Oct 2025AY 2022-23

Bench: Shri Kul Bharat & Shri Nikhil Choudharyआयकर अपील सं/ Ita No.638/Lkw/2024 ननिाारण वर्ा/ Assessment Year: 2022-23 Arif Industries Pvt Ltd V. Commissioner Of Income 2Nd Floor Metro City Centre, Tax Appeals/National Metro City, Paper Mill Faceless Appeal Centre Compound, Nishat Ganj, Delhi. Lucknow-226006. Pan:Aacca2048M अपीलार्थी/(Appellant) प्रत्यर्थी/(Respondent) अपीलार्थी कक और से/Appellant By: Shri Rajeev Joshi, Ca प्रत्यर्थी कक और से /Respondent By: Shri Amit Kumar, Cit(Dr) सुनवाई कक तारीख / Date Of Hearing: 09 09 2025 घोर्णा कक तारीख/ Date Of 28 10 2025 Pronouncement: आदेश / O R D E R

For Appellant: Shri Rajeev Joshi, CAFor Respondent: Shri Amit Kumar, CIT(DR)

Section 139Section 139(1)Section 143(1)(a)Section 44ASection 80

condition for claiming deduction had not been satisfied and, therefore, the action of the Assessing Officer in allowing rebate u/s 80-IA was erroneous and prejudicial to the interest of the Revenue. After issuance of the notice the Commissioner of Income Tax passed the order dated 29.03.2007 whereby he held

Gmm Pfaulder Ltd., Ahmedabad vs. The Pr.CIT, Ahmedabad-1, Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 839/AHD/2025[2020-21]Status: DisposedITAT Ahmedabad28 Oct 2025AY 2020-21

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinhaआयकर अपील सं /Ita No.839/Ahd/2025 िनधा"रण वष" /Assessment Year : 2020-21 Gmm Pfaulder Ltd. The Pr.Cit बनाम/ 3Rd Floor, B-Jadav Chambers Ahmedabad-1 V/S. Navrangpura H.O. Ahmedabad – 380 015 Ashram Road Ahmedabad – 380 009 "थायी लेखा सं./Pan: Aabcg 0563 A (अपीलाथ"/ Appellant) ("" यथ"/ Respondent) Assessee By : Shri S.N. Soparkar, Sr. Advocate Revenue By : Shri Sher Singh, Cit-Dr सुनवाई की तारीख/Date Of Hearing : 09/09/2025 घोषणा की तारीख /Date Of Pronouncement: 28 /10/2025 आदेश/O R D E R Per Siddhartha Nautiyal, Jm: This Appeal Filed By The Assessee Is Directed Against The Order Of Learned Principal Commissioner Of Income-Tax, Ahmedabad-1 [Hereinafter Referred To As “Ld. Pr. Cit” For Short] Dated 07/03/2025 Passed In Exercise Of His Revisionary Jurisdiction Under Section 263 Of The Income-Tax Act, 1961 [Hereinafter Referred To As "The Act" For Short] For Assessment Year (Ay) 2020- 21. 2. The Assessee Has Raised The Following Grounds Of Appeal: Gmm Pfaulder Ltd. Vs. Pcit Asst. Year : 2020-21 2

For Appellant: Shri S.N. Soparkar, Sr. AdvocateFor Respondent: Shri Sher Singh, CIT-DR

Section 135Section 143(3)Section 144BSection 263Section 32Section 80G

Income tax Appellate Tribunal for past assessment year 2005-06, therefore, the Order passed by the Ld AD allowing such provision is neither erroneous nor prejudicial to the interest of the revenue. 4. Disallowance of deduction claimed amounting to Rs.62,17,634/- under section 80G: 4.1 On the facts ... dated 21.01.2025 was issued requiring the assessee to explain why the assessment order dated 16.09.2022 should not be revised as being erroneous and prejudicial to the interests of the Revenue. In response, the assessee filed a detailed submission contending that depreciation on goodwill was allowable following the ratio laid down

Gokuldass Srinivasan, Udumalaipettai vs. ITO, Ward-2(4), Tiruppur

In the result, appeals filed by the assessee are allowed for statistical purposes

ITA 2230/CHNY/2025[2017-18]Status: DisposedITAT Chennai28 Oct 2025AY 2017-18

Bench: Shri Aby T. Varkey & Shri S.R.Raghunatha

Section 139(1)Section 144Section 147Section 148Section 194ASection 263

notice (SCN) dated 17.04.2023 and taking note that the assessee didn’t respond to his notices, held that the assessment order to be erroneous and prejudicial to the interest of the Revenue. And was pleased to set aside the assessment order and directed by impugned ITA Nos.1061 & 2230/Chny/2025 ... issued through ITBA to the assessee for objections if any to the proposed revision. The reason for considering the order of assessment as erroneous and prejudicial to the interest of revenue was also furnished to the assessee. On verification of records, it is seen that the assessing officer considered

Gokuldass Srinivasan, Udumalaipettai vs. PCIT, Coimbatore

In the result, appeals filed by the assessee are allowed for statistical purposes

ITA 1061/CHNY/2025[2017-18]Status: DisposedITAT Chennai28 Oct 2025AY 2017-18

Bench: Shri Aby T. Varkey & Shri S.R.Raghunatha

Section 139(1)Section 144Section 147Section 148Section 194ASection 263

M/S. Dharavi Sahakari Patpedhi Maryadit, Mumbai vs. Principal Commissioner of Income Tax -20, Mumbai

In the result appeal filed by the assessee stands dismissed

ITA 3105/MUM/2025[2020-21]Status: DisposedITAT Mumbai28 Oct 2025AY 2020-21

Bench: Smt. Beena Pillai () & Shri Arun Khodpia ()

Section 142(1)Section 143Section 143(2)Section 263Section 80Section 80P

section 263 treating the 2 ITA No.3105/Mum/2025; A.Y. 2020-21 M/s. Dharavi Sahakari Patpedhi Maryadit order passed by the learned Assessing Officer as erroneous and prejudicial to the interest of the revenue. 2. On the facts and in the circumstances of the case and in law, the learned PCIT erred ... sans Explanation 2, inserted by Finance Act 2015 w.e.f. 1/04/2015 that elucidated the circumstances when an assessment order can be held to be erroneous and prejudicial to the interests of the Revenue. 6.3 We also note that even before the said amendment, it stipulated the mandatory requirement of the order

Ganpati Infrastucture Development Company Ltd., Agra vs. Pr.CIT.-1, Agra

ITA 99/AGR/2022[2017-18]Status: DisposedITAT Agra27 Oct 2025AY 2017-18

Bench: : Shri S. Rifaur Rahman & Shri Sunil Kumar Singh

Section 143(1)Section 143(2)Section 143(3)Section 263Section 270A

assessment is wholly unjustified and out-of jurisdiction. That he further erred _in holding that the order passed by the assessing officer is erroneous and prejudicial to the interest of Revenue while the assessing officer had made the detailed scrutiny and considered all replies filed by Assessee as is evidenced

ACIT, Circle, Gandhidham vs. Kutch District Co-Operative Milk Producers Union Limited, Anjar

In the result, appeal find by the revenue is dismissed

ITA 212/RJT/2025[2017-18]Status: DisposedITAT Rajkot27 Oct 2025AY 2017-18

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं/.Ita No.212/Rjt/2025 "नधा"रणवष"/ Assessment Year: 2017-18 The Acit, Circle, Kutch District Co-Operative बनाम Gandhidham Milk Producers Union Ltd. Vs. C.O. Apmc Premises, Versamedi Naka, Near Railway Crossing Anjar, Gujarat-37010 Pan : Aaaak9845N (अपीलाथ"/Appellant) (""यथ"/Respondent) : "नधा"रती क" ओर से/Assessee By : Shri Akshay Modi, Ld.Ar राज"व क" ओर से/Revenue By : Shri Sanjay Punglia, Ld. Cit-Dr

For Appellant: Shri Akshay Modi, ld.ARFor Respondent: Shri Sanjay Punglia, Ld. CIT-DR

Section 143(3)Section 144BSection 250Section 263Section 80PSection 80P(2)(d)

made inquires in detail and accepted genuineness of same, such view of Assessing Officer being a plausible view could not be considered erroneous or prejudicial to interest of revenue. The facts of this case were that respondent assessee has filed its return of income showing total income ... aforesaid two companies and such view of the Assessing Officer is a plausible view", and therefore, the same cannot be said to be erroneous or prejudicial to the interest of the Revenue" 12. The Supreme Court in another recent case of Principal Commissioner of Income- tax 2 v. Shree Gayatri

Changela Mohanbhai R HUF, Near Bus Stand vs. Principal Commissioner of Income Tax, Aaykar Bhavan

In the result, the appeal of the assessee is allowed

ITA 210/RJT/2025[2020-21]Status: DisposedITAT Rajkot27 Oct 2025AY 2020-21

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinha

For Appellant: Shri Samir Jani, Ld. ARFor Respondent: Shri Sanjay Punglia, Ld. CIT(DR)

Section 133(6)Section 143(3)Section 263

assessment order passed by the assessing officer (A.O.) u/s 143(3) r.w.s. 144B of the Income-tax Act, 1961, on 08.09.2022, was erroneous and prejudicial to the interest of the revenue, therefore, ld.PCIT set-aside the order u/s 143(3) r.w.s. 144B of the Income ... these bills, vouchers were examined by the assessing officer on test check basis, therefore, order passed by the assessing officer is neither erroneous nor prejudicial to the interest of the revenue, hence, jurisdiction exercised by the learned PCIT under section 263 of the Act, may be quashed. Changelamohan Bhai

The West Godavari District Co Op Marketing Society Ltd, Eluru vs. Principal Commissioner of Income Tax-1, Visakhapatnam

ITA 356/VIZ/2025[2020-21]Status: DisposedITAT Visakhapatnam27 Oct 2025AY 2020-21

Bench: Shri Balakrishnan Sshri Sandeep Singh Karhailthe West Godavari District Co-Op. Marketing Society Ltd., Eluru, 25-55, Opposite To Fire Station N.R. Pet Eluru - 534006 ............... Appellant Pan: Aaaat7717Q V/S Principal Commissioner Of Income Tax, Pcit, Visakhapatnam - 1 ……………… Respondent

For Appellant: Shri GVN Hari, AdvocateFor Respondent: Shri M.N. Murthy Naik, CIT (DR)

Section 143(3)Section 144BSection 263Section 80PSection 80P(2)(a)Section 80P(2)(d)

learned Principal Commissioner of Income Tax is not justified in holding that the assessment order u/s 143(3) rws 144B dt. 25.09.2022 is erroneous and prejudicial to the interest of revenue. 3. The learned Principal Commissioner of Income Tax should have accepted that the interest received from deposits/savings account kept