Section 263 – CIT’s Power to Revise Erroneous & Prejudicial Assessment Orders: ITAT Ruling

Veena Shah Vs PCIT (ITAT Delhi) Power of the Principal Commissioner of Income Tax (PCIT) Under Section 263 and Taxability of Interest on Enhanced Compensation Introduction The Principal Commissioner of Income Tax (PCIT) holds the power under Section 263 of the Income Tax Act, 1961, to revise any assessment order that is erroneous and prejudicial to the interest of the revenue. This power ensures that incorrect tax assessments, which may result in loss of revenue to the government, can be rectified. A crucial case where this power was invoked is Veena Shah v. PCIT ([2024] 165 taxmann.com 51 (De...