Revisional jurisdiction u/s 263 unjustified without any error or infirmity in assessment order: ITAT Delhi

Simbhaoli Power Pvt Ltd Vs PCIT (ITAT Delhi)

ITAT Delhi held that revisional jurisdiction u/s. 263 of the Income Tax Act not invocable in absence of any error or infirmity in the assessment order which could make the assessment order erroneous and prejudicial to the interest of revenue.

Facts- Vide the present appeals, the appellant has mainly challenged the assumption of jurisdiction u/s. 263 of the Income Tax Act.

Conclusion- Held that where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done.

Held that it is an undisputed fact that the assessee is subsidiary of listed company, which means that the assessee is a subsidiary of a company in which public are substantially interested. Therefore, provisions of section 56(2)(vii)(b) do not apply to the assessee. Therefore, all the apprehensions raised by the PCIT for assuming jurisdiction u/s 263 of the Act are futile and without any backing of any provisions of the Act.

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