CIT can consider all aspects which were subject matter of AO’s order, if in his opinion, they are erroneous

BSES Rajdhani Power Ltd vs. Pr CIT (Delhi High Court)

Lack of opportunity at the revisional stage under Section 263 does not vitiate the entire order, or the proceedings; rather it is a curable defect.

Court is of the opinion that the ruling in Commissioner of Income tax v Amitabh Bacchan 2016 SCC Online SC 484 is decisive; it upholds the power of the Commissioner to consider all aspects which were the subject matter of the AO’s order, if in his opinion, they are erroneous, despite the assessee’s appeal on that or some other aspect. The Court held that:

“Reverting to the specific provisions of Section 263 of the Act what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the Revenue is the basic pre- condition for exercise of jurisdiction under Section 263 of the Act. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice which is implicit in the requirement cast by the Section to give the assessee an opportunity of being heard.

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