Section 145A(b) of the Income Tax Act
Income-tax Act, 2025: s.277
Section 145A(b) falls under section 145A of the Income-tax Act, 1961, which corresponds to section 277 (Method of accounting in certain cases) of the Income-tax Act, 2025.
Read section 277 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 145A(b) is Narayan Tatu Rane v. ITO (70 Taxmann.com 227), cited in 220 of the 112 judgments on BharatTax that turn on this section.
Leading authorities on Section 145A(b)
Before revising an assessment order under Section 263, the CIT/PCIT must conduct their own inquiries or verifications to establish that the Assessing Officer's order is erroneous and unsustainable in law, rather than merely directing further inquiry or pointing out the AO's lack of inquiry.
This case clarifies the scope of the Commissioner's revisional powers under Section 263 of the Income-tax Act, holding that an assessment order can only be revised if it is both erroneous and prejudicial to the interests of the revenue, echoing the principles laid down in Malabar Industrial.
An order by the Supreme Court dismissing a Special Leave Petition (SLP) at the threshold without detailed reasons does not constitute a declaration of law or a binding precedent. Such dismissal in limine offers no legal assistance.
The term 'record' under Section 263(1) of the Income Tax Act includes all material available to the Commissioner at the time of his examination, not merely the records that were available to the Assessing Officer when the original assessment order was passed.
For exercising revisional powers under Section 263, the Commissioner must examine the entire record of proceedings, not merely the assessment order, to ascertain whether the Assessing Officer applied their mind or conducted an enquiry on the issues. The 'record' includes all materials available at the time of examination by the Commissioner.
The Principal Commissioner of Income Tax cannot exercise revisional jurisdiction under Section 263 if the Assessing Officer has taken one of two possible views on a debatable issue during assessment proceedings.
This case establishes the principles for calculating compensation in motor accident and personal injury claims, including the selection of the multiplier based on the deceased's age, assessment of loss of dependency, consideration of future prospects, and deductions for personal expenses.
An Assessing Officer's order is deemed prejudicial to the interests of the revenue under Section 263 if, due to its erroneous nature, the revenue suffers a loss of lawfully payable tax. This principle applies where the Assessing Officer fails to conduct proper enquiry.
Rectification under Section 154 is permissible based on a subsequent judgment of the Jurisdictional High Court or the Supreme Court. Such a judgment clarifies the law as it always stood, thereby revealing a mistake apparent from the record.
Where the Assessing Officer has taken a plausible view based on sufficient details and disclosures on record, the assessment order cannot be treated as erroneous and prejudicial to the interests of revenue to invoke revisionary powers under Section 263.
