Revision under section 263 upheld where interest on delayed TDS payment was treated as inadmissible and prior approval under section 153D did not bar correction.

An assessment order was held erroneous and prejudicial to the interests of the Revenue where interest on delayed TDS payment was treated as an inadmissible business expenditure, justifying revision under section 263 of the Income-tax Act, 1961. The objection that prior approval under section 153D barred revision was rejected because such approval had been granted by the Joint Commissioner, while revisional power under section 263 vests in the Principal Commissioner or a higher authority. The cited precedent was found inapplicable on the facts, and no further deep enquiry was required for invoking revision. The revisional order was sustained and the assessee's challenge failed.

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Issues: Whether the Principal Commissioner was justified in exercising revision jurisdiction under section 263 of the Income-tax Act, 1961 in respect of the assessee's claim of interest on delayed TDS payment, and whether prior approval under section 153D barred such revision.

Analysis: The claim of interest on late deposit of TDS was treated as not allowable as business expenditure, and the assessment order was found to be erroneous and prejudicial to the interests of the Revenue. The objection based on prior approval under section 153D was rejected because the approval had been granted by the Joint Commissioner, whereas the revisional power under section 263 vests in the Principal Commissioner or higher authority. The cited precedent was held inapplicable on the facts, and no further deep enquiry was found necessary for invoking revision.

Conclusion: The revision under section 263 was validly exercised, and the assessee's challenge failed.

Final Conclusion: The revisional order was sustained and the assessee's appeal was dismissed.

Ratio Decidendi: Where an assessment order is erroneous and prejudicial to the interests of the Revenue, revisional jurisdiction under section 263 of the Income-tax Act, 1961 may be exercised by the competent Commissioner notwithstanding prior approval at the assessment stage under section 153D, if the statutory revisional authority is different and the approval does not foreclose correction of the error.

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