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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

Ashok Kumar, Ghaziabad vs. PCIT, Ghaziabad

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

ITA 4937/DEL/2019[2009-10]Status: DisposedITAT Delhi26 Jun 2024AY 2009-10

Bench: Shri Shamim Yahya & Ms. Madhumita Royshri Ashok Kumar, Vs. Pr.Cit, C/O M/S. Rrr Taxindia, Ghaziabad. D-28, South Extension Part – 1, New Delhi – 110 049. (Pan : Abppy8405P) (Appellant) (Respondent) Assessee By : Shri Somil Agarwal, Advocate Revenue By : Shri Sujit Kumar, Cit Dr Date Of Hearing : 13.06.2024 Date Of Order : 26.06.2024 Order Per Shamim Yahya: This Appeal By The Assessee Is Directed Against The Order Of The Ld. Pr.Cit, Ghaziabad Dated 30.03.2019 For The Assessment Year 2009-10. 2. Grounds Of Appeal Taken By The Assessee Read As Under :- “1. That Having Regard To Facts & Circumstances Of The Case, Ld. Pr.Cit Has Erred In Law & On Facts In Assuming Jurisdiction U/S 263 Of Income Tax Act, 1961 & Has Erred In Holding The Assessment Order Dated 29-12-2016 As Erroneous As Well As Prejudicial To The Interest Of Revenue. 2. That Having Regard To Facts & Circumstances Of The Case, Ld. Pr.Cit Has Erred In Law & On Facts In Holding As Under While Passing The Impugned Order.

For Appellant: Shri Somil Agarwal, AdvocateFor Respondent: Shri Sujit Kumar, CIT DR
Section 143(3)Section 147Section 148Section 263Section 54F

PCIT as no addition was made on account of reasons recorded for reopening of assessment and, therefore, assessment order is not erroneous and prejudicial to the interest of Revenue as alleged and thus assumption of jurisdiction u/s 263 is bad in law and deserves to be quashed. For this proposition ... exercise of power under Section 263 of the Act, it is mandatory that the order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. In the present case, the Assessing Officer did not make any addition for the reasons recorded at the time

Balaka Vinimay Pvt. Ltd., Kolkata vs. ITO, Ward-2(1), Kolkata

In the result, appeals of the assessee in ITA No

ITA 161/KOL/2024[2008-09]Status: DisposedITAT Kolkata21 Jun 2024AY 2008-09

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 160 & 161/Kol/2024 Assessment Year: 2008-09 Balaka Vinimay Pvt. Ltd. Income Tax Officer, Ward – 2(1), 9/12, Lal Bazar Street Vs Kolkata Kolkata - 700001 [Pan : Aadcb2610B] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri A.K. Tibrewal, A/R & Saurav Gupta, A/R Revenue By : Shri Abhijit Kundu, Cit, Sr. D/R सुनवाई क" तारीख/Date Of Hearing : 09/04/2024 घोषणा क" तारीख /Date Of Pronouncement: 21/06/2024 आदेश/O R D E R Per Dr. Manish Borad: The Instant Appeals Are Directed At The Instance Of The Assessee Against The Separate Orders Of The National Faceless Appeal Centre, Delhi, (Hereinafter The “Ld. Cit(A)”). Ita No. 160/Kol/2024 Is Against The Order Of The Ld. Cit(A) Dt. 29/11/2023, Passed U/S 250 Of The Income Tax Act, 1961 (Hereinafter ‘The Act’) Arising Out Of The Penalty Order Passed By The Ld. Assessing Officer U/S 271(1)(C) Of The Act & Ita No. 161/Kol/2023, Is Against The Order Of The Ld. Cit(A) Dt. 28/11/2023, Arising Out Of The Order Of The Ld. Assessing Officer Passed U/S 143(3) R.W.S. 254 Of The Act, For Assessment Year 2008-09. 2. Though The Assessee Has Raised Various Grounds In Both These Appeals, But The Effective Issue Raised In Ita No. 161/Kol/2024 Is Against The Addition Made U/S 68 Of The Act For Unexplained Share Capital Confirmed By The Ld. Cit(A) & In Ita No. 160/Kol/2024 Is Against The Levy Of Penalty U/S 271(1)(C) Of The Act On The Addition Made

For Appellant: Shri A.K. Tibrewal, A/R and Saurav Gupta, A/RFor Respondent: Shri Abhijit Kundu, CIT, Sr. D/R
Section 142(1)Section 143(3)Section 147Section 148Section 250Section 263Section 271(1)(c)Section 68

verify the genuineness and source of share capital as well as identity and creditworthiness of the shareholders, which rendered the assessment order erroneous and prejudicial to the interest of revenue and thus, order passed u/s 148 of I.T Act was set aside for fresh assessment. Accordingly, assessment in this case

Balaka Vinimay Pvt. Ltd., Kolkata vs. ITO, Ward-2(1), Kolkata

In the result, appeals of the assessee in ITA No

ITA 160/KOL/2024[2008-09]Status: DisposedITAT Kolkata21 Jun 2024AY 2008-09

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 160 & 161/Kol/2024 Assessment Year: 2008-09 Balaka Vinimay Pvt. Ltd. Income Tax Officer, Ward – 2(1), 9/12, Lal Bazar Street Vs Kolkata Kolkata - 700001 [Pan : Aadcb2610B] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri A.K. Tibrewal, A/R & Saurav Gupta, A/R Revenue By : Shri Abhijit Kundu, Cit, Sr. D/R सुनवाई क" तारीख/Date Of Hearing : 09/04/2024 घोषणा क" तारीख /Date Of Pronouncement: 21/06/2024 आदेश/O R D E R Per Dr. Manish Borad: The Instant Appeals Are Directed At The Instance Of The Assessee Against The Separate Orders Of The National Faceless Appeal Centre, Delhi, (Hereinafter The “Ld. Cit(A)”). Ita No. 160/Kol/2024 Is Against The Order Of The Ld. Cit(A) Dt. 29/11/2023, Passed U/S 250 Of The Income Tax Act, 1961 (Hereinafter ‘The Act’) Arising Out Of The Penalty Order Passed By The Ld. Assessing Officer U/S 271(1)(C) Of The Act & Ita No. 161/Kol/2023, Is Against The Order Of The Ld. Cit(A) Dt. 28/11/2023, Arising Out Of The Order Of The Ld. Assessing Officer Passed U/S 143(3) R.W.S. 254 Of The Act, For Assessment Year 2008-09. 2. Though The Assessee Has Raised Various Grounds In Both These Appeals, But The Effective Issue Raised In Ita No. 161/Kol/2024 Is Against The Addition Made U/S 68 Of The Act For Unexplained Share Capital Confirmed By The Ld. Cit(A) & In Ita No. 160/Kol/2024 Is Against The Levy Of Penalty U/S 271(1)(C) Of The Act On The Addition Made

For Appellant: Shri A.K. Tibrewal, A/R and Saurav Gupta, A/RFor Respondent: Shri Abhijit Kundu, CIT, Sr. D/R
Section 142(1)Section 143(3)Section 147Section 148Section 250Section 263Section 271(1)(c)Section 68

verify the genuineness and source of share capital as well as identity and creditworthiness of the shareholders, which rendered the assessment order erroneous and prejudicial to the interest of revenue and thus, order passed u/s 148 of I.T Act was set aside for fresh assessment. Accordingly, assessment in this case

Sh. Abhishek Bansal, Barnala vs. Pr. CIT, Patiala

In the result, the Assessee’s appeal is partly allowed

ITA 131/CHANDI/2023[2017-18]Status: DisposedITAT Chandigarh13 Jun 2024AY 2017-18

Bench: Shri A.D. Jain & Dr Krinwant Sahayआयकर अपील सं./ Ita No. 131/Chd/2023 "नधा"रण वष" / Assessment Year : 2017-18 Abhishek Bansal, Vs. Pr. Commissioner बनाम Prop. M/S Lifeline Multi Income Tax, Specialilty Hospitality, 25 Acre Patiala Extn., Near Fountain Chowk, Barnala, Punjab "थायी लेखा सं./Pan No: Acgpb5740E अपीलाथ" ./ Appellant ""यथ" / Respondent ( Hybrid Mode ) "नधा"रती क" ओर से/Assessee By : Sh. Sudhir Sehgal, Advocate राज"व क" ओर से/ Revenue By : Shri Rohit Sharma, Cit Dr सुनवाई क" तार"ख/Date Of Hearing : 09.05.2024 उदघोषणा क" तार"ख/Date Of Pronouncement : 13.06.2024 आदेश/Order Per Dr. Krinwant Sahay, A.M.:

For Appellant: Sh. Sudhir Sehgal, AdvocateFor Respondent: Shri Rohit Sharma, CIT DR
Section 115Section 115BSection 133Section 263

holding that the assessment as framed by the Assessing Officer 131-Chd-2023 – Shri Abhishek Bansal, Barnala 3 vide order, dated 21.07.2019 was erroneous and prejudicial to the interest of revenue. 2. That the Ld. PCIT has failed to appreciate the fact that the Assessing Officer at the time ... PCIT, Patiala on the ground that the assessment order framed by the Assessing Officer was erroneous and prejudicial to the interest of Revenue. 8. Brief facts of the case are that there was a survey u/s 133 of the Act conducted at the professional premises of the Assessee

Rajan Hemalatha, Chennai vs. DCIT-Corporate Circle 3(2), Chennai

In the result the appeal is dismissed

ITA 419/CHNY/2022[2017-18]Status: DisposedITAT Chennai12 Jun 2024AY 2017-18

Bench: Shri Ss Viswanethra Ravi & Shri Amitabh Shuklaआयकर अपील सं./Ita No.419/Chny/2022 निर्धारण वर्ा /Assessment Years: 2017-18 Rajan Hemalatha, Flat No.C3, 3Rd Floor, Dy. Commissioner Of Income Tax 61 Golden Kings Court, Tas Enclave, Circle-3(2), Chennai. 10Th Main Road, Anna Nagar, Chennai-40. [Pan: Aatph2012G] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Appellant By : Shri S.P.Chidambaram, Advocate प्रत्यर्थी की ओर से /Respondent By : Shri Nilay Baran Som, Cit सुनवाई की तारीख/Date Of Hearing : 28.05.2024 घोषणा की तारीख /Date Of Pronouncement : 12.06.2024

For Appellant: Shri S.P.Chidambaram, AdvocateFor Respondent: Shri Nilay Baran Som, CIT
Section 143(3)Section 14ASection 263

increase of Rs.14,72,51,828/-. The source for this increase was not investigated by the Assessing Officer. Therefore the assessment was erroneous and prejudicial to the interest of the revenue. 7. It is also seen that there was a cash deposit of Rs.6,51,42,171/- in the bank ... examined by the Assessing Officer. 9. In view of the above, it is clear that the assessment order passed by the AO is erroneous and prejudicial to the interests of the revenue. Therefore, | hereby set aside the assessment to the file of the Assessing Officer to make detailed enquiries

Ramasamy Sathiyan, Karur vs. ACIT Central Circle 2, Trichy

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

ITA 324/CHNY/2022[2018-19]Status: DisposedITAT Chennai12 Jun 2024AY 2018-19

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. No.324/Chny/2022 िनधा"रण वष"/Assessment Years: 2018-19 Ramasamy Sathyan, Vs. The Assistant Commissioner Of 32, Kamarajapuram North, Income Tax, Karur, Tamil Nadu 639 002. Central Circle 2, [Pan: Aayps7833F] Trichy. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri S. Sridhar, Advocate ""थ" की ओर से/Respondent By : Shri R. Clement Ramesh Kumar, Cit सुनवाई की तारीख/ Date Of Hearing : 09.05.2024 घोषणा की तारीख /Date Of Pronouncement : 12.06.2024 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal By The Assessee Is Directed Against The Order Dated 08.03.2022 Passed By The Ld. Principal Commissioner Of Income Tax (Central), Chennai-2, Chennai Under Section 263 Of The Income Tax Act, 1961 [“Act” In Short] For The Assessment Year 2018-19..

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Shri R. Clement Ramesh Kumar, CIT
Section 10Section 143(3)Section 156Section 263Section 263(1)

assessment order dated 27.12.l2019 passed by the Assessing Officer under section 143(3) 2 I.T.A. No.324/Chny/22 r.w.s. 153C of the Act being erroneous and prejudicial to the interest of Revenue, non-est and non-service, secondly, on merits in the given facts and circumstances of the case ... failed to give a finding as to how the original assessment order 3 I.T.A. No.324/Chny/22 dated 27.12.2019 passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue. Further, he submits that a contention was raised by the assessee before the ld. PCIT that the proposed addition