Case Law Details
Kaur Cookies (P) Ltd Vs PCIT (ITAT Delhi)
ITAT Delhi held that for invoking revisional jurisdiction u/s 263 it is necessary to satisfy twin conditions i.e. one being that order should be erroneous and second, such order should be prejudicial to the interests of the Revenue. Non-satisfaction of the conditions renders the proceedings unsustainable.
Facts- the assessee filed its return of income declaring loss of Rs. 2,40,88,622/- on 6.11.2017. Thereafter, revised return was filed on 21.06.2018 declaring loss of Rs. 2,40,84,958/-. The case was selected for scrutiny assessment and the assessment was completed at a loss of Rs. 2,40,67,255/- after making addition of Rs. 17,703/-.
Thereafter the learned PCIT after examining the record issued notice u/s 263 of the Act calling upon the assessee as to why the assessment order dated 10.12.2019 be not revised. In response thereto the assessee filed its reply. However, the reply of the assessee was not found acceptable and the learned PCIT held the assessment order dated 10.12.2019 as erroneous in as much as prejudicial to the interest of revenue. He, therefore, directed the assessing Officer to frame the assessment de novo. Aggrieved against this the assessee is in appeal before this Tribunal.
Conclusion- The law is well settled. The powers u/s 263 can be exercised if the order sought to be revised is erroneous inasmuch as prejudicial to the interests of the Revenue. Hence twin conditions are required to be satisfied – one being that order should be erroneous and second, such order should be prejudicial to the interests of the Revenue.
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