“assessment order erroneous”

Rectification & RevisionSection 263Section 263534 judgments

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

Leading authorities on assessment order erroneous

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.

Parashuram Pottery Works Co. Ltd. v. ITO

106 ITR 1 · 1977 · Supreme Court

486

citing judgments

The principle of finality dictates that stale issues should not be reactivated, and lapse of time brings repose to judicial and quasi-judicial controversies. A Commissioner cannot substitute their judgment for the Assessing Officer's unless the assessment order is legally erroneous, not merely less elaborate, thus limiting revisionary powers under Section 263.

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.

Judgments citing assessment order erroneous

Keeran Muhammed Basheer, Kannur vs. DCIT, Centralcircle 1, Kozhikode

In the result, appeal filed by the assessee stands allowed

ITA 340/COCH/2025[2018-19]Status: DisposedITAT Cochin04 Aug 2025AY 2018-19

Bench: Shri Inturi Rama Rao, Am & Shri Sonjoy Sarma, Jm

For Appellant: ------- None -------For Respondent: Shri Sanjit Kumar Das, CIT-DR

Section 132Section 132(4)Section 139(1)Section 143Section 153ASection 153DSection 263

contents of the loose-sheets found during the course of search indicating the payment of perquisites to the employees, rendered the assessment order erroneous and prejudicial to the interests of Revenue and the learned PCIT rightly exercised the power of revision and, therefore, no interference is called for. 7 Meat

Hester Bioscience Limited, Mehsana vs. The Pr.CIT-1, Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 1084/AHD/2025[2020-21]Status: DisposedITAT Ahmedabad04 Aug 2025AY 2020-21

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Dhinal Shah, ARFor Respondent: Shri R P Rastogi, CIT-DR

Section 115BSection 143(3)Section 144BSection 201Section 263Section 40Section 80G

returned, without making any adjustments or disallowances. Upon examination of the records, the Principal Commissioner noted two key issues that rendered the assessment order erroneous and prejudicial to the interests of the Revenue. First, it was observed that the assessee’s auditor had certified in the tax audit report that

The Citizen Co-Op-Society Limited, Hyderabad vs. DCIT., Circle-9(1), Hyderabad

In the result, appeal filed by the assessee is allowed

ITA 388/HYD/2025[2020-21]Status: DisposedITAT Hyderabad30 Jul 2025AY 2020-21

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Manjunatha, G.आ.अपी.सं /Ita No.388/Hyd/2025 (िनधा"रण वष"/Assessment Year: 2020-21) The Citizen Cooperative Vs. Dy.Cit Society Limited, Hyderabad Circle 9 (1) Pan:Aaaat3952F Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Ravi Bharadwaj, Ca राज" व "ारा/Revenue By:: Shri Narender Kumar Naik, Cit (Dr) सुनवाई की तारीख/Date Of Hearing: 07/07/2025 घोषणा की तारीख/Pronouncement: 30/07/2025 आदेश/Order Per Vijay Pal Raothis Appeal Filed By The Assessee Is Directed Against The Revision Order Dated 13/02/2025 Of The Learned Pr. Cit Passed U/S 263 Of The Act For The A.Y.2020-21. 2. The Assessee Has Raised The Following Grounds Of Appeal: “1. The Order Passed By The Learned Principal Commissioner Of Income Tax (Pcit) - Iv U/S 263 Of The Act Is Erroneous Both In Law & Facts Of The Case. 2. The Order Passed By The Learned Principal Commissioner Of Income Tax (Pcit) U/S 263 Of The Act Is Bad In Law & Need To Be Quashed.

For Appellant: Shri Ravi Bharadwaj, CAFor Respondent: : Shri Narender Kumar Naik, CIT (DR)

Section 142(1)Section 143(3)Section 263Section 80P

allowed by the Ld. AO after due examination, and mere disagreement with the Ld. AO's order does not constitute the assessment order erroneous or prejudicial to the interest of revenue. 6. The Ld PCIT has failed to appreciate the fact that he has no jurisdiction ... order is completely silent, which shows that there is no application of mind on the part of the Assessing Officer which renders the assessment order erroneous so far as it is prejudicial to the interest of the Revenue. The learned DR has further submitted that the learned

Binitaben Sandipkumar Patel, Vadodara vs. The Pr.CIT, Vadodara-1, Vadodara

The appeal of the assessee is allowed

ITA 702/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad28 Jul 2025AY 2018-19

Bench: Ms.Suchitra R. Kamble & Shri Makarand V.Mahadeokarasstt.Year : 2018-19 Sejalben Patel The Pr.Cit-1 1049, Kantvalue Faliyu Vs. Vadodara. At & Po-Karkhadi Tal. Padra, Dist. Vadodara. Pan : Drhpp 9550 D Asstt.Year : 2018-19 Binitaben Sandipkumar Patel The Pr.Cit-1 Javla, Chotra Pase Vs. Vadodara. Savli, Dist. Vadodara. Pan : Cwopp 4609 Q (Applicant) (Responent)

For Appellant: Ms.Urvashi Sodhan, AR

Section 139(1)Section 144BSection 147Section 148Section 194Section 263Section 31Section 54

considered by the AO, the mere fact that the AO does not refer the matter to the DVO does not render the assessment order erroneous or prejudicial. It was further held that such an order constitutes a possible view, and hence cannot be interfered with under section ... particularly where the assessee had supported her computation with a registered valuer’s report and sale deed particulars, cannot render the assessment order erroneous or prejudicial to the interest of revenue. More importantly, in the absence of any valuation report forming part of the ITA No.701 & 702/Ahd/2025 14 record

Sejalben Patel, Vadodara vs. The Pr.CIT, Vadodara-1, Vadodara

The appeal of the assessee is allowed

ITA 701/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad28 Jul 2025AY 2018-19

For Appellant: Ms.Urvashi Sodhan, AR

Section 139(1)Section 144BSection 147Section 148Section 194Section 263Section 31Section 54

Nirmal Bang Securities Private Limited, Mumbai vs. Principal Commissioner of Income Tax, Mumbai 4, Mumbai

The appeal of the appellant is dismissed

ITA 2454/MUM/2025[2020-21]Status: DisposedITAT Mumbai25 Jul 2025AY 2020-21

Bench: Shri Narender Kumar Choudhry (Jm) & Shri Omkareshwar Chidara (Am) Nirmal Bang Securities P. Ltd. Pcit B-2, Marathon Innova, Aayakar Bhavan Ganpatrao Kadam Marg Vs. M.K. Road Opp. Peninsula Corporate Churchgate Lower Parel West Mumbai-400 020. Mumbai-400 013. Pan : Aaacn7369I Appellant Respondent

For Appellant: Shri Leyaqat Ali AafaquiFor Respondent: Shri Anant N. Pai

Section 135Section 143(3)Section 263Section 37Section 80GSection 80G(2)(iiihk)

claimed under Section 80G out of the CSR expenditure. This lack of inquiry on a key issue makes the assessment order erroneous. As held by the Hon'ble Supreme Court in CIT v. Amitabh Bachchan [(2016) 384 ITR 200 (SC)], if the Assessing Officer does not examine an important issue

Gujarat Industrial Investment Corporation Limited, Gandhinagar vs. The Pr. CIT, Ahmedabad-3, Ahmedabad

In the result, appeal filed by the assessee is allowed

ITA 942/AHD/2024[2018-19]Status: DisposedITAT Ahmedabad24 Jul 2025AY 2018-19

Bench: SMT. ANNAPURNA GUPTA (Accountant Member), SHRI T.R. SENTHIL KUMAR (Judicial Member)

For Appellant: Shri Manish B Chaudhari, CFOFor Respondent: Shri Rignesh Das, CIT. DR

Section 115JSection 143(3)Section 14ASection 263

assessee by the orders of the ITAT. The order of the Ld.PCIT reveals that despite noting so she still held the assessment order erroneous since she noted that Revenue had not accepted the orders of the ITAT and had preferred appeal against those orders before the Hon’ble High Court ... Considering the admitted fact that the issues identified by the Ld.PCIT on which she found the assessment order erroneous, were decided in favour of the assessee in preceding years, there is no case at all for holding the assessment orders erroneous on the said issues. And therefore, for this reason

Acc Mineral Resources Limited, Mumbai vs. Principle Commissioner of Income Tax, Mumbai-1, Mumbai

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

ITA 2687/MUM/2024[2018-19]Status: DisposedITAT Mumbai24 Jul 2025AY 2018-19

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am Acc Minerals Resources Limited Principal Commissioner Of Income 121, Cement House, Maharshi Karve Tax, Mumbai – 400 001. Vs. Road, Church Gate, Mumbai – 400020. Pan/Gir No. Aaact2214N (Appellant) : (Respondent) Assessee By : Shri Saurabh Soparkar (Virtually Appear) Respondent By : Shri Shekhar L. Gajbhiye, Cit Dr Date Of Hearing : 29.04.2025 Date Of Pronouncement : 24.07.2025 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, Mumbai -1 (‘Ld. Pcit’ For Short), Passed U/S.263 Of The Income Tax Act, 1961 (‘The Act'), Pertaining To The Assessment Year (‘A.Y.’ For Short) 2018-19. 2. The Assessee Has Raised The Following Grounds Of Appeal: 1. In Law & In The Facts & Circumstances Of The Appellant'S Case, Impugned Order U/S. 263 Of The Act Passed By Pcit-1, Mumbai Is Bad In Law & Deserves To Be Quashed. 2. In Law & In The Facts & Circumstances Of The Appellant'S Case, The Pcit-1, Mumbai Has Erred In Setting Aside The Assessment Order Dated 20.04.2021 Passed By The Assessing Officer Without Considering The Fact That The Assessing Officer During The Course Of Assessment Proceedings Has Already Gone Through Issue

For Appellant: Shri Saurabh Soparkar (Virtually appear)For Respondent: Shri Shekhar L. Gajbhiye, CIT DR

Section 142(1)Section 143(2)Section 143(3)Section 263Section 35D

that during the assessment proceedings, the ld. AO had failed to conduct any inquiry in respect of the said transaction, therefore making the assessment order erroneous and prejudicial to the interest of revenue. The ld. Senior Counsel further stated that the ld. PCIT in the impugned order has also mentioned ... allowability of expenditure u/s. 35D of the Act but had not gone into the issue of write off of loan making the assessment order erroneous in so far as it is prejudicial to the interest of the revenue. The ld. DR further relied on the amendment brought about to Explanation

Bandigadi Chandrappashetty Rajashekarappa, Shimoga vs. Income Tax Officer, Ward-1, Shimoga

In the result, the appeal of the assessee is partly allowed

ITA 307/BANG/2025[2015-16]Status: DisposedITAT Bangalore23 Jul 2025AY 2015-16

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Ravishankar S.V AdvocateFor Respondent: Shri Shivanand Kalakeri, CIT (DR)

Section 143(3)Section 263

calling for and examining the record of any proceedings under the Act by the CIT leading him to consider the assessment order erroneous etc. A communication from the AO is not `the record of any proceedings under this Act’. To put it simply, the consideration that the assessment order ... motu calling for and examining the record of the assessment proceedings and thereafter considering the assessment order erroneous and prejudicial to the interests of the revenue. The AO recommending a revision to the CIT has no statutory sanction and is a course of action unknown

Bandigadi Chandrappashetty Rajashekarappa, Shimoga vs. Income Tax Officer, Ward-1, Shimoga

In the result, the appeal of the assessee is partly allowed

ITA 306/BANG/2025[2015-16]Status: DisposedITAT Bangalore23 Jul 2025AY 2015-16

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Ravishankar S.V AdvocateFor Respondent: Shri Shivanand Kalakeri, CIT (DR)

Section 143(3)Section 263

Sri. Bandigadi Chandrappashetty Rajashekara, Shivamogga vs. Income-Tax Officer, Ward-4, Shimoga

In the result, the appeal of the assessee is partly allowed

ITA 773/BANG/2023[2015-16]Status: DisposedITAT Bangalore23 Jul 2025AY 2015-16

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Ravishankar S.V AdvocateFor Respondent: Shri Shivanand Kalakeri, CIT (DR)

Section 143(3)Section 263

Sri. Bandigadi Chandrappashetty Rajashekara, Shivamogga vs. Income Tax Officer, Ward-4, Shivamogga

In the result, the appeal of the assessee is partly allowed

ITA 772/BANG/2023[2015-16]Status: DisposedITAT Bangalore23 Jul 2025AY 2015-16

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Ravishankar S.V AdvocateFor Respondent: Shri Shivanand Kalakeri, CIT (DR)

Section 143(3)Section 263

Bhagwan Vardhman Shwetamber Murtipujak Tapagacch Jain Sangh, Mumbai vs. Commissioner Income Tax, (Exemptions), Mumbai

In the result, appeal of the assessee is allowed

ITA 2378/MUM/2024[2012-13]Status: DisposedITAT Mumbai23 Jul 2025AY 2012-13

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Anikesh Banerjee, Hon’Ble

For Appellant: Shri Dharan Gandhi, A/RFor Respondent: Shri Satyaprakash R. Singh, CIT, D/R

Section 11Section 11(1)(d)Section 12ASection 144Section 147Section 263

because of which the expenditure claimed by the assessee was allowed and only the balance corpus was assessed to tax which made the assessment order erroneous and prejudicial to the interest of the revenue. 6. Before us, the ld. Counsel for the assessee strongly contended that since the assessment order

Lekhakosh Karmachari Sahakari Patpedhi Sanstha Maryadit, Pune vs. Pr. CIT, Pune-4, Pune

In the result, the appeal of the assessee is allowed

ITA 575/PUN/2024[2017-18]Status: DisposedITAT Pune22 Jul 2025AY 2017-18

Bench: Shri R.K. Panda & Ms. Astha Chandra

For Appellant: Shri Kishor B. PhadkeFor Respondent: Shri Amol Khairnar

Section 263

this issue which was required. Hence, failure on the part of the Ld. AO in examining the above issue has rendered the assessment order erroneous in so far as it is prejudicial to the interest of the Revenue. Also, the Ld. AO has not verified the aspect of principle

Sri Sai Construction Co, Nizamabad vs. DCIT., Circle-1, Nizamabad

In the result appeal of the assessee is allowed

ITA 670/HYD/2025[2018-19]Status: HeardITAT Hyderabad16 Jul 2025AY 2018-19

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA, K A Sai PrasadFor Respondent: Sri Narender Kumar Naik, CIT-DR

Section 143(2)Section 143(3)Section 263

assessment order. The Assessing Officer failed to verify the above three issues in light of relevant facts which render the assessment order erroneous and prejudicial to the interests of Revenue. Therefore, called-upon the 7 ITA.No.670/Hyd./2025 assessee to file it's objections, if any, for the proposed revision ... verify the above three issues, in light of Explanation-2 to Section-263 of the Income Tax Act, 1961 which render the assessment order erroneous and prejudicial to the interests of Revenue. The PCIT discussed the above three issues and held that, although, there is a difference in turnover

Kerala Transport Development Finance Corporation Ltd, Trivandrum vs. The PCIT, Trivandrum

In the result, appeal filed by the assessee stands allowed

ITA 443/COCH/2023[2018-19]Status: DisposedITAT Cochin15 Jul 2025AY 2018-19

Bench: Shri Inturi Rama Rao, Am & Sonjoy Sarma, Jm Assessment Year:2018-19 Kerala Transport Development Finance .......... Appellant Corporation Limited, Thiruvananthapuram. Pan: Aabck1318F Vs.

For Appellant: Smt. Anoopa, AdvocateFor Respondent: Smt. Veni Raj, CIT-DR

Section 115JSection 143(3)Section 263Section 32

order dated 23/03/2021 accepting the returned income. Subsequently, on review of the assessment record, the Ld. PCIT, Trivendrum, formed an opinion that the assessment order erroneous and prejudicial to the interests of the Revenue for the reasons that the AO accepted the following two claims without any verification

Asian Institute of Gastroenterology Private Limited, Hyderabad vs. DCIT., Circle-1(1), Hyderabad

In the result, appeals filed by the assessee for both the assessment years 2020-2021 and 2021-2022 are allowed

ITA 610/HYD/2025[2021-22]Status: DisposedITAT Hyderabad11 Jul 2025AY 2021-22

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: CA, S. VenugopalFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 143(3)Section 14ASection 263

been made and allowing relief without enquiring into the aspect of disallowance u/sec.14A read with Rule 8D of I.T Rules, 1962, render the assessment order erroneous in so far as prejudicial to the interests of the revenue. Therefore, called-upon the assessee to file it’s objections ... relevant facts with regard to applicability of provisions of section 14A read with Rule 8D of I.T. Rules, 1962, which renders the assessment order erroneous and prejudicial to the interests of revenue. The learned PCIT discussed the issue at length, in light of Explanation-2 to Sec.263

Asian Institute of Gastroenterology Private Limited, Hyderabad vs. DCIT., Circle-1(1), Hyderabad

In the result, appeals filed by the assessee for

ITA 609/HYD/2025[2020-21]Status: DisposedITAT Hyderabad11 Jul 2025AY 2020-21

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: CA, S. VenugopalFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 143(3)Section 14ASection 263

Disha Resources Ltd. (Formerly Known As Arihant Avenues and Credit Limited.), Ahmedabad vs. The ACIT, Central Circle-2(1), Ahmedabad

In the result, the appeal of the assessee is dismissed

ITA 535/AHD/2025[2014-15]Status: DisposedITAT Ahmedabad09 Jul 2025AY 2014-15

Bench: Dr. B.R.R. Kumar, Vice-Ms Suchitra Kamble

For Appellant: Shri Pritesh Shah, ARFor Respondent: Shri Suresh Chand Meena, Sr. DR

Section 131Section 142(1)Section 143(2)Section 147Section 148Section 35(1)(ii)Section 35(1)(iii)

view of the above, we have no hesitation in upholding the order of the Ld.CIT holding the assessment order erroneous for having allowed a patently ineligible claim of weighted deduction to the assessee. 17. In the result, the appeal of the assessee is dismissed.” 6. In the absence

Disha Resources Ltd. (Formerly Known As Arihant Avenues and Credit Limited.), Ahmedabad vs. The ACIT, Central Circle-2(1), Ahmedabad

In the result, the appeal of the assessee is dismissed

ITA 534/AHD/2025[2013-14]Status: DisposedITAT Ahmedabad09 Jul 2025AY 2013-14

Bench: Dr. B.R.R. Kumar, Vice-Ms Suchitra Kamble

For Appellant: Shri Pritesh Shah, ARFor Respondent: Shri Suresh Chand Meena, Sr. DR

Section 131Section 142(1)Section 143(2)Section 147Section 148Section 35(1)(ii)Section 35(1)(iii)