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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether revision under section 263 of the Income-tax Act, 1961 was justified where the Assessing Officer had examined the TDS issue, considered the assessee's explanation and taken a possible view.
Analysis: The assessment order showed inquiry on the disallowance relating to TDS on rent and technical service payments, including the assessee's explanation that the payee had accounted for the income and furnished the necessary accountant's certificate. The revisional jurisdiction under section 263 can be exercised only when the assessment order is both erroneous and prejudicial to the interests of revenue. Where the Assessing Officer has made inquiry and adopted one of the permissible views, the order cannot be revised merely because the Commissioner holds a different opinion. The record showed application of mind by the Assessing Officer and acceptance of the assessee's claim after verification, so the revisional assumption of lack of inquiry was not sustainable.
Conclusion: The revisionary order under section 263 was not sustainable and was quashed.
Ratio Decidendi: Section 263 cannot be invoked where the assessment order is founded on inquiry and a legally permissible possible view, since such an order is not both erroneous and prejudicial to the interests of revenue.
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