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“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

Anand Construwell Private Limited, Nashik vs. Principal Commissioner of Income Tax, Nashik -1, Nashik

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

ITA 955/PUN/2024[2019-20]Status: DisposedITAT Pune29 Nov 2024AY 2019-20

Bench: Shri R. K. Panda & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.955/Pun/2024 िनधा"रण वष" / Assessment Year: 2019-20 Anand Construwell Private Vs. Pcit-1, Nashik. Limited, Ramchandra Apartments, Makhmalabad Road, Panchvati, Nashik- 422003. Pan : Aafca7736H Appellant Respondent Assessee By : Shri Pramod S. Shingte Revenue By : Shri Keyur Patel Date Of Hearing : 05.09.2024 Date Of Pronouncement : 29.11.2024 आदेश / Order Per Vinay Bhamore, Jm: This Appeal Filed By The Assessee Is Directed Against The Order Dated 19.03.2024 Passed By Ld. Pcit-1, Nashik [‘Ld. Pcit’] For The Assessment Year 2019-20. 2. The Appellant Has Raised The Following Grounds Of Appeal :- “1. On The Basis Of The Facts & Circumstances Of The Case, The Order Passed U/S. 263 By The Principal Commissioner Of Income-Tax, Nashik May Please Be Quashed. 2. On The Basis Of The Facts & Circumstances Of The Case, The Principal Commissioner Of Income-Tax Is Not Justified In Invoking The Provisions Of Section 263 By Holding That Provisions Of Section 69C Are Applicable In The Present Case As The Assessee Was Not Able To Explain The Sources Of Expenditure

For Appellant: Shri Pramod S. ShingteFor Respondent: Shri Keyur Patel
Section 115BSection 133ASection 143(2)Section 143(3)Section 154Section 263Section 69C

Therefore, it can be inferred safely that AO has failed to cause proper inquiries and consequential verifications which rendered assessment order erroneous and prejudicial to the interest of revenue. 07. In the light of the detailed discussion made hereinabove, I am of the considered opinion that the assessment order passed

Anna Aluminium Company Pvt Ltd, Aluva vs. The PCIT Kochi -1, Kochi

In the result, appeal of the assessee is dismissed

ITA 361/COCH/2023[2018-19]Status: DisposedITAT Cochin29 Nov 2024AY 2018-19

Bench: Shri Inturi Rama Rao & Shri Prakash Chand Yadavassessmentyear:2018-19 Anna Aluminium Company Private Limited Kp 111 847 Kizhakkambalam Vs. Aluva Pcit Ernakulam 683 562 Kochi Kerala Pan No : Aafca6562R Appellant Respondent Appellant By : Sri.Harikrishnanunny, Ca Respondent By : Sri.Sanjit Kumar Das, Cit-Dr Date Of Hearing : 20.11.2024 Date Of Pronouncement : 29.11.2024 O R D E R Perprakash Chand Yadav: The Present Appeal Of The Assessee Is Arising From The Order Of Pcit Kochi Dated 28.3.2023. 2. Brief Facts Of The Case Are That Assessee, Filed Its Return Of Income On 24.10.2018 Declaring An Income Of Rs.8,59,05,700/-. Thereafter, The Case Of The Assessee Was Selected For Scrutiny. During The Course Of Assessment Proceedings, The Ao Issued Various Notices To The Assessee & Sought Compliance From The Assessee & Completed The Assessment As Per The Returned Income. Anna Aluminium Company Private Limited, Aluva Page 2 Of 3 3. The Ld. Pcit Called For Records & Examined The Records Of Assessment & Observed That The Ao Has Not Examined The Claim Of Provision For Bad & Doubtful Debts. The Ld. Pcit Was Of The View That The Ao Has Allowed The Claim Of Bad & Doubtful Debts Merely For The Provisions Made By The Assessee. Therefore, The Ld. Pcit Formed An Opinion That The Order Of Ao Was Erroneous & Prejudicial To The Interest Of Revenue. Accordingly, The Ld. Pcit Terming The Order Of Assessing Officer As Erroneous & Prejudicial To The Interest Of Revenue Set Aside The Same.

For Appellant: Sri.Harikrishnanunny, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 263

doubtful debts merely for the provisions made by the assessee. Therefore, the ld. PCIT formed an opinion that the order of AO was erroneous and prejudicial to the interest of revenue. Accordingly, the ld. PCIT terming the order of Assessing Officer as erroneous and prejudicial to the interest of revenue

Bhogilal Bhailalbhai Patel, Vadodara vs. The Pr. CIT-1, Vadodara

In the result, the appeal of the assessee is dismissed

ITA 613/AHD/2024[2015-16]Status: DisposedITAT Ahmedabad28 Nov 2024AY 2015-16

Bench: Shri T.R. Senthil Kumar & Shri Narendra Prasad Sinhaआयकर अपील सं./I.T.A. No. 613/Ahd/2024 ("नधा"रण वष" / Assessment Year : 2015-16) बनाम/ Bhogilal Bhailalbhai The Pr. Commissioner Of Patel Income Tax-1 Vs. 475/2, Sagar Faliya, At & Vadodara Post Bhayali, Vadodara - 391410 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Bkkpp3136R (Appellant) .. (Respondent) अपीलाथ" ओर से /Appellant By : Shri Hemant Suthar, A.R. ""यथ" क" ओर से/Respondent By : Shri Samir Tekriwal, Cit. Dr 19/11/2024 Date Of Hearing Date Of Pronouncement 28/11/2024

For Appellant: Shri Hemant Suthar, A.RFor Respondent: Shri Samir Tekriwal, CIT. DR
Section 143(3)Section 263Section 54BSection 54F

that the assessment order passed by the Ld. A.O. u/s. 143(3) r.w.s. 263 r.w.s. 144B of the I.T. Act dated 29.09.2021 is erroneous and prejudicial to the interest of the revenue so as to justify the invocation of powers u/s. 263 and directing to revise the assessment order ... already examined and disallowed by the AO, the Ld. PCIT was not correct in holding that the order of the AO was erroneous and prejudicial to the interest of the revenue. He submitted that the issue of deduction claimed under the head ‘capital gain’ on which the case was initially

Ujwal Fine Homes, Pune vs. The Principal Commissioner of Income Tax -3, Pune

In the result, appeal of the assessee is dismissed

ITA 491/PUN/2024[2018-19]Status: DisposedITAT Pune28 Nov 2024AY 2018-19

Bench: Ms.Astha Chandra & Dr.Dipak P. Ripoteआयकर अपील सं. / Ita Nos.491/Pun/2024 िनधा"रण वष" / Assessment Year: 2018-19 Ujwal Fine Homes, V The Principal High Bliss, S No.23, Dhayri S Commissioner Of Income Narhe Road, Pune – 411041. Tax, Pune -3, Pune. Pan; Aabfu7293E Appellant/ Assessee Respondent / Revenue Assessee By Shri C.H.Naniwadekar – Ar Revenue By Shri Ajay Kumar Keshari – Cit(Dr) Date Of Hearing 21/11/2024 Date Of Pronouncement 28/11/2024 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Filed By The Assessee Directed Against The Order Of Ld.Principal Commissioner Of Income Tax, Pune-3, Pune U/Sec.263 Of The Income Tax Act, 1961; Dated 09.02.2024 For The A.Y.2018- 19. The Assessee Has Raised The Following Grounds Of Appeal : “1. In Issuing The Notice U/S 263 Of The Income-Tax Act, 1961 For Ay 2018-19

Section 142Section 143(3)Section 171Section 263

holding that the assessment order passed u/s 143(3) r.w.s. 144B of the Income-tax Act dated 17/04/2021 for AY 2018-19 is erroneous and prejudicial to the interest of the Revenue and consequently setting aside partly the assessment order to the file of AO for the purpose of examining ... verified these issues during the assessment. On specific question from the Bench, the Ld.AR admitted that the Assessment Order was erroneous and prejudicial to the interest of the Revenue. However, Ld.AR submitted the thePr.CIT has not given any findings on the impugned issue in the order u/s 263 though

M/S. Anabond Ltd., Chennai vs. PCIT, Chennai-1

In the result, all the grounds appeal raised by the assesse are allowed

ITA 1625/CHNY/2024[2018-19]Status: DisposedITAT Chennai27 Nov 2024AY 2018-19

Bench: Shri Aby T Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita Nos.1625/Chny/2024 निर्धारण वर्ा /Assessment Years: 2018-19 M/S. Anabond Limited The Principal Commissioner Of Type-Ii, 36, Dr. V.S.I. Estate Income Tax-1 Tiruvanmiyur, Chennai Chennai-600041. [Pan: Aacca4158Q] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) : Shri B.Ramakrishnan, F.C.A. अपीलार्थी की ओर से/ Assessee By : Shri Nilay Baran Som, Cit प्रत्यर्थी की ओर से /Revenue By सुनवाई की तारीख/Date Of Hearing : 02.09.2024 घोषणा की तारीख /Date Of Pronouncement : 27.11.2024

For Appellant: Shri Nilay Baran Som, CIT
Section 143(3)Section 263Section 35Section 5Section 80I

case of the Ld. Counsel for the assessee that the impugned assessment order u/s 143(3) dated 18.04.2021 of the AO is neither erroneous nor prejudicial to the interest of the revenue so as to justify any invocation of exercise of revisionary powers u/s 263 by the PCIT qua assessee ... this case the learned Commissioner of Income-tax has not given a finding as to how the order was erroneous and prejudicial to the interests of the revenue. Therefore, twin conditions necessary for invoking the provisions of section 263 are not satisfied. Such an order has no leg to stand

Money Magnum Constructions, Mumbai vs. Principal Commissioner of Income Tax, Circle- 27, Mumbai

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

ITA 2445/MUM/2024[2014-15]Status: DisposedITAT Mumbai27 Nov 2024AY 2014-15

Bench: Shri Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm Money Magnum Constructions Pr. Cit, Circle-27 Room No. 401, 4Th Floor, Plot No. 157 Samruddhi, 18Th Road, Near Ambedkar Garden, Tower No. 6, Vashi Railway Station, Vs. Chembur (E), Mumbai-400 071 Commercial Complex, Vashi, Navi Mumbai-400 703. Pan/Gir No. Aacfn 9126 C (Assessee) : (Respondent) Assessee By : Shri. Paresh Shaparia : Ms.Sanyogita Nagpal Respondent By : 09.09.2024 Date Of Hearing Date Of Pronouncement : 27.11.2024 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been Filed By The Assessee, Challenging The Order Of The Learned Principal Commissioner Of Income Tax, Pcit, Mumbai-27 (‘Ld. Pcit For Short), Passed U/S.263 Of The Income Tax Act, 1961 (‘The Act'), Relevant To Assessment Year (‘A.Y.’ For Short) 2014-15. 2. The Assessee Has Raised The Following Ground Of Appeal: I. “Order Passed Under Section 263 Is Bad In Law: 1. On The Facts & In The Circumstances Of The Case & In Law, The Learned Pr. Cit 27 Erred In Treating The Order Under Section 147 R.W.S 144B Of The Income- Tax Act, 1961 (The Act) Dated 24 March 2022 (Re-Assessment Order) As Erroneous & Prejudicial To The Interest Of The Revenue & Thereby Setting Aside The Order. 2. On The Facts & In The Circumstances Of The Case & In Law, The Learned Pr.Cit 27 Failed To Appreciate The Fact That The Original Assessment Order As Well As Re- Assessment Order Have Duly Considered The Transaction Of Nsel Commodity Loss Of Rs

For Appellant: Shri. Paresh ShapariaFor Respondent: 09.09.2024
Section 143(1)Section 143(3)Section 147Section 148Section 263Section 40A(2)(b)

order under section 147 r.w.s 144B of the Income- tax Act, 1961 (the Act) dated 24 March 2022 (re-assessment order) as erroneous and prejudicial to the interest of the revenue and thereby setting aside the order. 2. On the facts and in the circumstances of the case ... NSEL commodity loss of Rs 2 Money Magnum Constructions vs. Pr. CIT 8,68,70,608 whereby the orders passed are neither erroneous nor prejudicial to the interest of revenue. 3. The Learned Pr. CIT. Mumbai-27 ought not to have treated re-assessment order passed under section 147 dated

The Thanthi Trust, Chennai vs. CIT(Exemptions), Chennai

In the result, the appeal of the assessee is allowed

ITA 1369/CHNY/2024[2018-19]Status: DisposedITAT Chennai26 Nov 2024AY 2018-19

Bench: Shri Aby T Varkey, Hon’Ble & Shri S.R.Raghunatha, Hon’Bleआयकरअपीलसं./Ita No.: 1369/Chny/2024 िनधा"रणवष" / Assessment Year: 2018-19 Commissioner Of Income Tax The Thanthi Trust, V. (Exemptions), No. 86, Evk Sampath Road, Chennai – 600 034. Vepery, Chennai – 600 007. [Pan: Aaatt-0038-R] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ"क"ओरसे/Appellant By : Shri. V.S. Jayakumar, Sr. Advocate For Shri.Mudit Bohara, Advocate & Shri. K.R. Adivarahan, Ca ""यथ"क"ओरसे/Respondent By : Shri. Nilay Baran Som, Cit सुनवाई क" तारीख/Date Of Hearing : 30.08.2024 घोषणा क" तारीख/Date Of Pronouncement : 26.11.2024 आदेश /O R D E R

For Appellant: Shri. V.S. Jayakumar, Sr. Advocate for Shri.Mudit Bohara, Advocate and Shri. K.RFor Respondent: Shri. Nilay Baran Som, CIT
Section 11(4)Section 12ASection 143(1)Section 143(2)Section 143(3)Section 263

Payment of advance tax by the assessee in :-10-: ITA. No:1369/Chny/2024 excess relevant to the AY. 2018-19, is taken as erroneous and prejudicial to the interest of the revenue. Though the CIT/AO agrees that the payment of tax is application of income, makes a departure by stating that ... that the AO did not make inquiries in that regard and so the order of NFAC u/s.143(3) of the Act is erroneous and prejudicial to the interest of revenue. The ld.AR submitted that the Assessee Trust had to pay higher advance tax in this year of account

Asian Hotels (North) Limited, New Delhi vs. Pr, CIT, Delhi-1, New Delhi

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

ITA 654/DEL/2021[2016-17]Status: DisposedITAT Delhi26 Nov 2024AY 2016-17

Bench: Shri S. Rifaur Rahman & Shri Sudhir Pareek, Judicialmember M/S. Asian Hotels (North) Limited, Vs. Pr.Cit, 1A, Hotel Hyatt Regency, Delhi – 1. Bhikaji Cama Place, New Delhi – 110 066. (Pan: Aaaca0125H) (Appellant) (Respondent) Assessee By : Shri Abhishek Jain, Ca Revenue By : Shri Javed Akhtar, Cit Dr Date Of Hearing : 17.09.2024 Date Of Order : 26.11.2024 O R D E R Per S. Rifaur Rahman, Am : 1. This Appeal Is Filed By The Assessee Against The Order Of Ld. Principal Commissioner Of Income-Tax, Delhi-1 (Hereinafter Referred To ‘Ld. Pcit’) Dated 31.03.2021 For Assessment Year 2016-17. 2. Brief Facts Of The Case Are, Assessee Filed Its Return Of Income On 29.09.2016 Declaring A Loss Of Rs.32,48,76,393/-. The Case Was Selected For Complete Scrutiny Under Cass. The Assessment Was Completed Under Section 143 (3)

For Appellant: Shri Abhishek Jain, CAFor Respondent: Shri Javed Akhtar, CIT DR
Section 143Section 143(3)Section 41(1)Section 438

while perusing the assessment order dated 23.11.2018 observed that the order passed u/s 143(3) of the Act was believed to be erroneous and prejudicial to the interest of Revenue for the following reasons :- “2. On perusal of assessment order dated 23.11.2018, the assessment order was believed to be erroneous ... learned PCIT under section 263 7 of the Act setting aside the assessment framed under section 143(3) of the Act as erroneous and prejudicial to the interests of the revenue is bad in law and void-ab- initio. 2.2 On the facts and circumstances of the case

Guljeet Kaur Johal, Chandigarh vs. Principal Commissioner of Income Tax-1, Chandigarh

In the result, the appeal is allowed

ITA 379/CHANDI/2024[2013-14]Status: DisposedITAT Chandigarh25 Nov 2024AY 2013-14

Bench: Shri Rajpal Yadav & Dr Krinwant Sahayआयकर अपील सं./ Ita No. 379/Chd/2024 "नधा"रण वष" / Assessment Year : 2013-14 Guljeet Kaur Johal, Vs. Pcit-1, बनाम H.No. 107, Sector 28-A, Chandigarh Chandigarh 160019 "थायी लेखा सं./Pan No: Aklpj8345G अपीलाथ"/ Appellant ""यथ"/ Repsondent (Physical Hearing ) "नधा"रती क" ओर से/Assessee By : Shri Parikshit Aggarwal, Ca राज"व क" ओर से/ Revenue By : Shri Rohit Sharma, Cit Dr सुनवाई क" तार"ख/Date Of Hearing : 29.10.2024 उदघोषणा क" तार"ख/Date Of Pronouncement : 25.11.2024 आदेश/Order Per Krinwant Sahay, A.M.:

For Appellant: Shri Parikshit Aggarwal, CAFor Respondent: Shri Rohit Sharma, CIT DR
Section 143(3)Section 147Section 148Section 263

spirit of section 263 of the Act requires a clear-cut finding by the PCIT bringing out on record the elements of ‘erroneous’ and ‘prejudicial to the interest of Revenue’ in an order passed by the A.O. 379-Chd-2024 – Guljeet Kaur Johal, Chandigarh 8 The true spirit of section ... also requires a clear-cut finding of the PCIT on twin conditions of satisfaction that an order passed by the Assessing Officer is ‘erroneous’ and ‘prejudicial to the interest of Revenue’. It never pre-supposes any hypothetical situation wherein, something could or could not happen based on some future enquiry