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

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....f 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 the essential conditions for the exercise of the power under t....

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....n (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, interest payable and penalty imposable on the income so estimated; ....

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....perly 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 Commissioner would be competent to exercise his revisionary powers under sectio....