8 August 2022


Judgments

Income Tax Appellate Tribunal

Paramount Propbuild Pvt. Ltd. Vs. Pr. Cit, New Delhi

MANU/ID/0161/2022

14.02.2022

Direct Taxation

For exercising power under Section 263 of IT Act, there should be material on record to prove that order is not only prejudicial to the interest of Revenue but also erroneous in nature

Present appeal by the assessee is preferred against the order of the Principal Commissioner of Income Tax [Appeals], framed under Section 263 of the Income tax Act, 1961 [IT Act] pertaining to Assessment Year 2016-17.

The sum and substance of the grievance of the assessee is that, the learned PCIT erred in assuming jurisdiction under Section 263 of the IT Act and further erred in holding the assessment and rectification order passed under Section 143(3) and 154/143(3) of the IT Act as erroneous and prejudicial to the interest of the Revenue.

For exercising power under Section 263 of the IT Act, there should be material on record which would satisfy the ld. PCIT in a prima facie manner that the order is not only prejudicial to the interest of the Revenue but also erroneous in nature. If any of these factors is not satisfied, he cannot assume jurisdiction to initiate suo moto power of revision.

A perusal of the order of the PCIT framed under Section 263 of the IT Act shows that it is solely based upon the letter sent by the Assessing Officer proposing for invoking proceedings under Section 263 of the Act in the case of the assessee.

Present is not a case of lack of enquiry or assessment being framed in haste. Proper enquiries were made by the Assessing Officer during the course of assessment proceedings and after considering all the facts and evidences, the Assessing Officer took a view which is a plausible view. Therefore, it is not open to the learned PCIT to direct a re-enquiry as he is of a different view.

The assessment order is neither erroneous nor prejudicial to the interest of the Revenue. Therefore, assumption of jurisdiction under Section 263 of the Act by the ld. PCIT is bad in law. The order of the learned PCIT is set aside. Appeal allowed.

Tags : Assessment Jurisdiction Validity

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