“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

Krishnasamy Bhuvaneswari, Coimbatore vs. ITO, Non Corprate Ward 4(2), Coimbatore

In the result, appeal filed by the assessee is treated as allowed for statistical purposes

ITA 1528/CHNY/2023[2013-14]Status: DisposedITAT Chennai25 Jun 2025AY 2013-14

Bench: Shri Manu Kumar Giri & Shri S. R. Raghunathaआयकर अपील सं./Ita No.:1528/Chny/2023 िनधा"रण वष" / Assessment Year:2013-14 Krishnasamy Bhuvaneswari, Ito, 43/63, Rajamanai Thottam, Vs. Non Corporate Ward 4(2), Kupanur, Mathampatty, Coimbatore. Coimbatore – 641 010. [Pan:Ahypb-5938-M] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से/Appellant By : Shri. N. Arjun Raj, Advocate ""थ" की ओर से/Respondent By : Shri. M. K. Biju, C.I.T. - D.R. सुनवाई की तारीख/Date Of Hearing : 05.06.2025 घोषणा की तारीख/Date Of Pronouncement : 25.06.2025

For Appellant: Shri. N. Arjun Raj, AdvocateFor Respondent: Shri. M. K. Biju, C.I.T. - D.R

Section 263Section 263(2)

authorities below. We find that the ld.PCIT is of the opinion that the Assessing Officer’s order u/s.143(3) dated 24.03.2016 was erroneous and prejudicial to the interest of the revenue necessitating invoking of provisions of Section 263 of the Act to remedy the loss to the revenue and hence

First Advantage Private Limited, Mumbai vs. Principal Commissioner of Income Tax, Mumbai - 4, Mumbai

In the result, appeal of the assessee is allowed

ITA 3291/MUM/2025[2020-21]Status: DisposedITAT Mumbai25 Jun 2025AY 2020-21

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Sandeep Singh Karhail, Hon’Ble

For Appellant: Shri Nitesh Joshi/Ms. Sonakshi Jhunjhunwala, A/RsFor Respondent: Shri Bhagirath Ramawat, Sr. D/R

Section 115JSection 135Section 142(1)Section 143(2)Section 143(3)Section 263Section 37Section 80G

considered as voluntary donation. On such belief, the ld. Pr. CIT was of the opinion that the assessment order dated 29/09/2022 is erroneous and prejudicial to the interest of the revenue and accordingly set aside the same and directed the AO to enquire the claim of Section 80G deduction

ITO, Ward-1(1), Faridabad vs. Chaman, Faridabad

In the result, appeal of the assessee is allowed

ITA 2774/DEL/2024[2017-18]Status: DisposedITAT Delhi25 Jun 2025AY 2017-18

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahmanassessment Year: 2017-18 Vs. Chaman, Income Tax Officer, Ward-1(1), H. No. 437, Sector-9, Faridabad Faridabad Pan: Bfapd6698P (Appellant) (Respondent) With C.O. No.103/Del/2024 [Arising Out Of Ita No.2774/Del/2024] Assessment Year: 2017-18 Vs. Income Tax Officer, Chaman, H. No. 437, Sector-9, Ward-1(1), Faridabad, Haryana Faridabad Pan: Bfapd6698P (Appellant) (Respondent) Assessee By Sh. Gaurav, Adv. Department By Sh. Rajesh Kumar Dhanesta, Sr. Dr Date Of Hearing 25.06.2025 Date Of Pronouncement 25.06.2025 Order Per Satbeer Singh Godara, Jm This Revenue’S Appeal Ita No. 2774/Del/2024 & Assessee’S Cross Objection C.O. No. 103/Del/2024 For Assessment Year 2017- 18, Arises Against The Commissioner Of Income Tax (Appeals)/National Faceless Appeal Centre [In Short, The

Section 147Section 250(4)

powers vested in him under section 263 of the Act, the Ld. PCIT held the impugned order of the Ld. AO as erroneous and prejudicial to the interest of Revenue. According to Ld. PCIT, the Ld. AO should have taken into consideration, the binding decision of Hon'ble Jurisdictional High ... appeal before the Tribunal and all the grounds relate thereto. 6. The Ld. AR submitted that the assessment order was neither erroneous nor prejudicial to the interest of Revenue because (i) the Ld. AO has passed the order after making proper enquiries during assessment proceedings; (ii) the Ld. PCIT

Gopal, Aligarh vs. Principal Commissioner of Income Tax-1, Agra

In the result, the appeal of the assessee is dismissed

ITA 71/AGR/2025[2021-22]Status: DisposedITAT Agra24 Jun 2025AY 2021-22

Bench: Shri Sunil Kumar Singh & Shri Manish Agarwalprincipal Gopal Commissioner Of Gali No.10, P-365/2, Vs. Income Tax-1, Near Haija Hospital, Agra Goolar Road, Uttar Pradesh-202001. Pan-Aempg0384B (Appellant) (Respondent) Assessee By None Department By Shri Shailendra Srivastava. Sr. Dr Date Of Hearing 19/05/2025 Date Of Pronouncement 24/06/2025

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

facts reaches to the Gopal vs. PCIT conclusion that an assessment order passed by the Assessing Officer is without enquiries and thus is erroneous and prejudicial to the interest of Revenue. We find that such observations of the Ld. PCIT were not controverted by the assessee, and, therefore, we find ... error in the order of Ld. PCIT holding the assessment order as erroneous and prejudicial to the interest of the Revenue. Accordingly, the same is hereby upheld. All the grounds of appeal of the assessee are dismissed. 6. In the result, the appeal of the assessee is dismissed. Order pronounced

Pune Zilha Madhyawarti Sahakari Bank Sevakanchi Sahakari Patsanstha Maryadit, Pune vs. Pr. Cti -3, Pune

In the result, appeal of the assessee is allowed

ITA 1086/PUN/2025[2021-22]Status: DisposedITAT Pune23 Jun 2025AY 2021-22

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1086/Pun/2025 Assessment Year : 2021-22

For Appellant: Shri Sarang GudhateFor Respondent: Shri Rakesh Ranjan

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

Pune also was not justified in setting aside the order of the A.Ο. holding it as erroneous and prejudicial to the interests of revenue because A.O. had not examined and allowed the deduction u/s 80P(2)(a)(i)/80P(2) (d) of the Act as it is outside ... scope of S. 80P on the contrary the order passed by the Ld. A.O. is erroneous and prejudicial to the interest of the assessee, and hence appeal is filed by the assessee to the Hon'ble CIT (A) NFAC on 24-01-2023 which is pending, and hence the action

Ntt Global Networks Private Limited, Mumbai vs. PCIT -6, Mumbai

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

ITA 3095/MUM/2025[2020-21]Status: DisposedITAT Mumbai23 Jun 2025AY 2020-21

Bench: SHRI VIKRAM SINGH YADAV (Accountant Member), MS. KAVITHA RAJAGOPAL (Judicial Member)

For Appellant: Shri Bhadresh DoshiFor Respondent: Shri Leyaqat Ali Aafaqui, SR AR

Section 143(3)Section 263Section 37(1)Section 80GSection 80G(2)Section 80G(5)

initio: 2.1 The Learned PCIT grossly erred in upholding that the order of the Assessing Officer passed u/s. 143(3) r.w.s. 144B was erroneous and prejudicial to the interests of the NTT Global Networks Pvt. Ltd. Revenue, without appreciating that the twin condition essential for exercising revisional jurisdiction ... were not present. 2.2 The Learned PCIT erred in holding that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue, without appreciating the fact that mere adopting of one view out of two possible views based on the specific inquiries conducted

Hari Singh, Palwal vs. ITO, Ward-1(3), Faridabad

In the result, appeal of the assessee is allowed

ITA 4082/DEL/2024[2019-20]Status: DisposedITAT Delhi23 Jun 2025AY 2019-20

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 142(1)Section 143Section 143(1)(a)Section 143(2)Section 143(3)Section 263Section 28Section 56(2)(viii)Section 57

powers vested in him under section 263 of the Act, the Ld. PCIT held the impugned order of the Ld. AO as erroneous and prejudicial to the interest of Revenue. According to Ld. PCIT, the Ld. AO should have taken into consideration, the binding decision of Hon'ble Jurisdictional High ... appeal before the Tribunal and all the grounds relate thereto. - 6. The Ld. AR submitted that the assessment order was neither erroneous nor prejudicial to the interest of Revenue because (i) the Ld. AO has passed the order after making proper enquiries during assessment proceedings; (ii) the Ld. PCIT

Hansa Jitendra Haria, Jamnagar vs. Principal Commissioner of Income Tax, Jamnagar

In the result, the appeal of the assessee is dismissed

ITA 104/RJT/2024[2013-14]Status: DisposedITAT Rajkot20 Jun 2025AY 2013-14

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं./Ita No.104/Rjt/2024 ("नधा"रण वष" / Assessment Year: (2013-14) (Hybrid Hearing) Hansa Jitendra Haria Vs. Principal Commissioner Of 2, Oswal Colony, Near Rajendra Income Tax Balkrindagan, Jamnagar, Gujarat Jamnagar 361005. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aahph4309L (Assessee) (Respondent)

For Appellant: Shri Dhaval Shah, ARFor Respondent: Shri Sanjay Punglia, CIT. DR

Section 10(38)Section 147Section 263Section 69A

advisedly and upon application of mind. The learned PCIT erred in law in treating the Assessment Order dated 30th 4. March 2022 as erroneous and prejudicial to the interests of the Revenue, based upon a different opinion formed by him and thus substituting the view taken by the learned ... learned Principal Commissioner of Income Tax, Jamnagar has erred in law as well in fact in holding assessment order as erroneous and prejudicial to the interest of Revenue after referring to the explanation 2 of section 263 of the Act which was not there in show cause notice

P P Kharpatil Constructions Pvt Ltd, Uran vs. Circle - Panvel, Panvel

In the result, appeal of the assessee is allowed

ITA 1294/PUN/2025[2020-21]Status: DisposedITAT Pune20 Jun 2025AY 2020-21

Bench: Ms.Astha Chandra & Dr.Dipak P. Ripoteआयकर अपील सं. / Ita No.1294/Pun/2025 िनधा"रण वष" / Assessment Year: 2020-21 P P Kharpatil Construction Pvt. V The Principal Ltd., S. Commissioner Of Income 656, At Post Chimer Taluka, Tax, Thane-1. Uran District, Raigad – 410206. Maharashtra. Pan: Aaccp4003B Appellant/ Assessee Respondent / Revenue Assessee By Mrs. Naina Chaurasia & Shri Sameer Gavli – Ar’S Revenue By Shri Amit Bobde –Cit(Dr) Date Of Hearing 18/06/2025 Date Of Pronouncement 20/06/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Is Filed By The Assessee Against The Order Of Ld.Principal Commissioner Of Income Tax, Thane-1 Passed Under Section 263 Of The Income Tax Act, 1961 For A.Y.2020-21, Dated 27.03.2025 Emanating From Assessment Order U/S.143(3)R.W.S. 144Bof The Income Tax Act, Dated 22.09.2022. The Assessee Has Raised Following Grounds Of Appeal :

Section 142(1)Section 142(2)Section 143(2)Section 143(3)Section 263

case and in law, the Principal Commissioner of Income Tax (PCIT-1), Thane, erred in holding that the assessment order is erroneous and prejudicial to interest of revenue to the extent of revenue income of Rs.34,49,17,710/-, being difference in amount shown in Form 26AS and as reported ... examined during the assessment proceedings. The AO has failed to inquire/verify/examine all the issues while passing the assessment order, thereby making the order erroneous and prejudicial to the interest of the revenue. Assessment order is required to be passed by making relevant enquiries and verification by the Assessing Officer. Explanation

Gandhi Special Tubes Limited, Mumbai vs. ACIT- Circle 5(1)(1), Mumbai

The appeal of the assessee is allowed

ITA 2562/MUM/2025[2020-2021]Status: DisposedITAT Mumbai20 Jun 2025AY 2020-2021

Bench: Justice (Retd.) C V Bhadang & Ms Padmavathy S, Am

For Appellant: Shri Swapnil Choudhary, Sr. DR

Section 143(3)Section 263Section 37(1)Section 80G

invoking the revision proceedings and consequently passing the order u/s. 263, by holding the assessment order u/s. 143(3) r.w.s. 144B to be erroneous and prejudicial to the interest of the revenue. 1.2 The Appellant prays that the revision order passed by the Ld. PCIT ... claimed as a deduction under section 80G of the Act. To this extent the PCIT held the order of the AO to be erroneous and prejudicial to the interest of the revenue and accordingly invoked the provisions of section 263 of the Act by issuing a show- cause notice

M/S Union Bank of India, Mumbai vs. Deputy Commissioner of Income Tax, Cricle -Ltu 2, Mumbai

In the result, appeal of the assessee is allowed

ITA 2956/MUM/2024[2019-20]Status: DisposedITAT Mumbai20 Jun 2025AY 2019-20

Bench: Shri Saktijit Dey, Hon’Ble & Shri Narendra Kumar Billaiya, Hon’Ble

For Appellant: Shri C. Naresh, A/RFor Respondent: Shri Vivek Perampurna, CIT D/R

Section 115JSection 143(3)Section 14ASection 263

directing the AO to examine the expenses u/s 37 without specifying any specific expenditure and concluding that the order of AO is erroneous or prejudicial to the interest of revenue. Your appellant craves leave to add, to amend, and / or vary the grounds of appeal before or at the time ... been decided in favour of the assessee and against the revenue. Therefore, insofar as, these issues are concerned, the assessment order is neither erroneous nor prejudicial to the interest of the revenue. I.T.A. No. 2956/Mum/2024 5 8. Coming to the issues relating to the broken period interest paid on purchase