Word ‘erroneous’ in section 263 includes failure to make an enquiry by the AO

Rain Commodities Ltd. Vs. Dy. CIT (ITAT Hyderabad)- Prejudicial to the interest of revenue appearing in section 263 is conjunction with the expression ‘erroneous’ and that every loss of revenue as a consequence of an order of the assessing officer cannot prejudice to the interest of Revenue. In case, where the assessing officer adopts one of the courses permissible in law where two views are plausible the CIT cannot exercise his power u/s 263 to defer with the AO even if there has been a loss of revenue. On the other hand, when the AO takes a view it is patently unsustainable, the CIT can...