Revisionary powers of Commissioner u/s 263 in respect of orders u/s 132(5).

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.... respect of orders under section 132(5). 2. Section 263 of the Income-tax Act empowers a Commissioner to call for and examine the records of any proceeding and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may pass such order thereon as the circumstances of the case justify. Thus, one of th....

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.... has not been realised or cannot be realised. 3. Sub-section (5) of section 132 of the Income-tax Act, 1961 empowers an I.T.O. to make an order, with the previous approval of the Inspecting Assistant Commissioner. (i) estimating the undisclosed income in a summary manner to the best of his judgment on the basis of materials available before him; (ii) Calculating and determining the tax, i....

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....Therefore, when an I.T.O. passes an order under section 132(5) without properly following the provisions of section 132(5)(i) (ii), (iia) and (iii) it can easily be concluded that his order is erroneous and it fails to make proper provision for the realisation of the lawful revenue due to the State and therefore, it is an order prejudicial to the interests of the revenue. In such a case, the Commi....