Section 263 of the Income Tax Act

Income-tax Act, 2025: s.377

Section 263 of the Income-tax Act, 1961 corresponds to section 377 (Revision of orders prejudicial to revenue) of the Income-tax Act, 2025.

Read section 377 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 263 is Malabar Industrial Co. Ltd. v. CIT (243 ITR 83), cited in 2,943 of the 13,616 judgments on BharatTax that turn on this section.

Leading authorities on Section 263

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.

Totgars Co-operative Sale Society Ltd. v. ITO
322 ITR 283 · 2010 · Supreme Court
1,283
citing judgments

The interest income earned by a cooperative society from investing its surplus funds in fixed deposits with banks is not "derived from" its eligible business activities and is taxable as "income from other sources" under Section 56, thus not qualifying for deduction under Section 80P.

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.

State Bank Of India v. CIT
389 ITR 578 · 2016 · High Court
817
citing judgments

Income arising from a cooperative society's surplus funds invested in short-term deposits and securities is not attributable to the society's core activities and, therefore, is not eligible for exemption under Section 80P(2)(a)(i) of the Income-tax Act.

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.

Madras Industrial Investment Corporation Ltd. v. CIT
225 ITR 802 · 1997 · Supreme Court
568
citing judgments

Expenditure that provides an enduring benefit should be amortized over its useful life, not allowed as a deduction in a single year, to prevent a distorted picture of profits. Specifically, premium paid on debentures for their issue should be amortized on a straight-line method over the life of the debentures.

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.

Subramanian and Anr. v. Siemens India Ltd. and Anr.
156 ITR 11 · 1985 · High Court
541
citing judgments

When there is a conflict between the decisions of non-jurisdictional High Courts, the view that favors the assessee should be preferred.

Judgments on Section 263

Delta Ceramic, Morbi vs. ITO, Ward-1, Morbi

In the result, appeal filed by the assessee in ITA No

ITA 735/RJT/2026[2018-19]Status: DisposedITAT Rajkot23 Sept 2026AY 2018-19

Bench: Dr. Arjun Lal Saini & Shri Sonjoy Sarmaआयकरअपीलसं./Ita No. 346/Rjt/2025 [ "नधा"रणवष"/Assessment Year: 2018-19 ] M/S. Solo Ceramics, The Pr. Commissioner Of Income- 8-A, National Highway, At. Tax, Rajkot-1, Rajkot, Vs. Lalpar, Dist. Morbi, Aayakar Bhavan, Race Course Ring Gujarat-363641 Road, Rajkot, Gujarat-360001 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Abgfs5907F (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकरअपीलसं./Ita No. 735/Rjt/2026 [ "नधा"रणवष"/Assessment Year: 2018-19 ] Delta Ceramic, The Income-Tax Officer, 8-A, National Highway, At. Lalpar, Vs. Ward-1, Morbi, Tal. Morbi, Income-Tax Office, Shakti Chamber, Gujarat-363642 Morbi, Gujarat-363642 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaifd3582C (अपीलाथ"/Appellant) (""यथ"/Respondent) Stay Application No. 09/Rjt/2026 [ In Ita No. 735/Rjt/2026 ] [ Assessment Year: 2018-19 ] Delta Ceramic, The Income-Tax Officer, 8-A, National Highway, At. Lalpar, Ward-1, Morbi, Vs. Tal. Morbi, Income-Tax Office, Shakti Chamber, Gujarat-363642 Morbi, Gujarat-363642 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaifd3582C (Appellant) (Respondent) Appellant By : Shri Mehul Ranpura, Ld. Ar Respondent By : Shri Ganesh Iyer & Shri Abiram Kartikeyan S., Ld. Sr. Dr Date Of Hearing : 07/07/2026 & 22/07/2026 Date Of Pronouncement : 23/09/2026

For Appellant: Shri Mehul Ranpura, Ld. ARFor Respondent: Shri Ganesh Iyer & Shri Abiram Kartikeyan S., Ld. Sr. DR
Section 147Section 148Section 250Section 263

Solo Ceramic, Morbi vs. PCIT, Rajkot-1, Rajkot

In the result, appeal filed by the assessee in ITA No

ITA 346/RJT/2025[2018-19]Status: DisposedITAT Rajkot23 Sept 2026AY 2018-19

Bench: Dr. Arjun Lal Saini & Shri Sonjoy Sarmaआयकरअपीलसं./Ita No. 346/Rjt/2025 [ "नधा"रणवष"/Assessment Year: 2018-19 ] M/S. Solo Ceramics, The Pr. Commissioner Of Income- 8-A, National Highway, At. Tax, Rajkot-1, Rajkot, Vs. Lalpar, Dist. Morbi, Aayakar Bhavan, Race Course Ring Gujarat-363641 Road, Rajkot, Gujarat-360001 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Abgfs5907F (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकरअपीलसं./Ita No. 735/Rjt/2026 [ "नधा"रणवष"/Assessment Year: 2018-19 ] Delta Ceramic, The Income-Tax Officer, 8-A, National Highway, At. Lalpar, Vs. Ward-1, Morbi, Tal. Morbi, Income-Tax Office, Shakti Chamber, Gujarat-363642 Morbi, Gujarat-363642 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaifd3582C (अपीलाथ"/Appellant) (""यथ"/Respondent) Stay Application No. 09/Rjt/2026 [ In Ita No. 735/Rjt/2026 ] [ Assessment Year: 2018-19 ] Delta Ceramic, The Income-Tax Officer, 8-A, National Highway, At. Lalpar, Ward-1, Morbi, Vs. Tal. Morbi, Income-Tax Office, Shakti Chamber, Gujarat-363642 Morbi, Gujarat-363642 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaifd3582C (Appellant) (Respondent) Appellant By : Shri Mehul Ranpura, Ld. Ar Respondent By : Shri Ganesh Iyer & Shri Abiram Kartikeyan S., Ld. Sr. Dr Date Of Hearing : 07/07/2026 & 22/07/2026 Date Of Pronouncement : 23/09/2026

For Appellant: Shri Mehul Ranpura, Ld. ARFor Respondent: Shri Ganesh Iyer & Shri Abiram Kartikeyan S., Ld. Sr. DR
Section 147Section 148Section 250Section 263

Sundaram Home Finance Ltd., Chennai vs. ITO, Corporate Ward-6(1), Chennai

In the result, appeal filed by the assessee stands dismissed

ITA 1996/CHNY/2026[2014-15]Status: DisposedITAT Chennai23 Sept 2026AY 2014-15

Bench: Shri Inturi Rama Rao & Shri Ss Viswanethra Raviिनधा"रण वष"/Assessment Year: 2014-15 Sundaram Home Finance Ltd, Income Tax Officer, 5Th Floor, Sundaram Towers, Corporate Ward-6(1), No.46, Whites Road, Royapettah, Chennai. Vs. Chennai – 600014 अपीलाथ" Appellant ""थ" Respondent Aadcs4826J Permanent Account Number Of Assessee: अपीलाथ" "ारा/Appellant Represented By: Mr.R.Vijayaraghavan- Advocate ""थ" "ारा/Respondent Represented By: Mr.Madhan Kumar – Sr.Dr सुनवाई की तारीख / Date Of Conclusion Of Hearing: 30.07.2026 घोषणा की तारीख / Date Of Pronouncement: 23.09.2026 आदेश / Order Per Inturi Rama Rao: This Appeal Filed By The Assessee Directed Against The Order Passed By Learned Commissioner Of Income Tax(Appeals)[Nfac], Dated 03.02.2026 Passed U/S.250 Of The Income Tax Act, 1961 For The Assessment Year 2014-15. 2. The Assessee Raised The Following Grounds Of Appeal : “1. The Order Passed By The Learned Commissioner Of Income Tax (Appeals) [Cit(A)], National Faceless Appeal Centre (Nfac) Confirming The Levy Of Penalty Under Section 271(1)(C) Of The Act Is Contrary To Law, Facts & Circumstances Of The Case & Therefore Liable To Be Set Aside.

Section 14ASection 250Section 271(1)(c)Section 275Section 36(1)Section 36(1)(viii)