Revision under section 263 fails when the underlying order has already been set aside and ceased to exist in law.

Section 263 cannot be invoked to revise an order that has already been set aside and is no longer operative in law. As the demand under sections 201(1) and 201(1A) in the assessee's own case had earlier been deleted, there was no live assessment order for the Commissioner to revise. The Tribunal treated the revisional action as directed against an inoperative order and held the invocation of section 263 unsustainable, quashing the revisionary order in favour of the assessee.

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Issues: Whether the revisionary order under section 263 could survive when the very order sought to be revised under sections 201(1) and 201(1A) had already been set aside by the Tribunal.

Analysis: The Tribunal noted that in the assessee's own case, the demand under sections 201(1) and 201(1A) had already been deleted by an earlier appellate order. The Commissioner nevertheless invoked section 263 to revise the same assessment order, even though that order had ceased to operate. Once the underlying order was set aside, there remained no live order for the Commissioner to revise. The Tribunal therefore treated the revisional exercise as directed against an inoperative order and found the invocation of section 263 unsustainable.

Conclusion: The revisionary order was invalid and liable to be quashed, in favour of the assessee.

Ratio Decidendi: Section 263 cannot be exercised to revise an order that has already been set aside and is no longer in existence in law.

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