TaxTMI 
TaxTMI 
2016 (3) TMI 1287
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....and law in setting aside by invoking the provisions of section 263, the order of the AO passed u/s 144 on 25.03.2013 without providing any proper opportunity of hearing. (ii) That Ld. Principal Commissioner of Income tax, Bathinda erred of fact and law in assuming the jurisdiction u/s 263 to pass an order for setting aside the order u/s 144 dated 25.03.2013 of the AO because all the issues which have been set aside to the AO have been examined in detail during the course of assessment proceedings and the order u/s 144 has been passed by the AO after due application of mind. (iii) The Ld. Principal Commissioner of Income Tax, Bathinda erred on fact and law while setting aside the order of the AO to give him a direction that....
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....rchases of assessee firm were in cash. Against the order issued u/s 263, the assessee submitted that Assessing Officer after due application of mind has rejected the books of accounts and had made addition applying net profit rate of 5% and therefore, order passed by Assessing Officer is neither erroneous and nor prejudicial to the interest of Revenue. However, the learned CIT did not agree with the submissions of the assessee and set aside the order of Assessing Officer and directed Assessing Officer to decide the issue afresh, keeping in view, the violation of provisions of section 40A(3) of the Act. 6. Aggrieved the assessee is in appeal before us. 7. At the outset, the learned AR submitted that Assessing Officer had rejected the b....
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.... Malabar Industial Co. Ltd. vs. CIT 243 ITR 0083 where in the Hon'ble Court has held that provisions of section 263 cannot be invoked to correct each and every type of mistake committed by AO. 9. In view of the above, the learned AR argued that the order passed by learned CIT needs to be quashed. 10. The learned DR, on the other hand, relied upon the order of Commissioner of Income Tax. 11. We have heard the rival parties and have gone through the material placed on record. We find that that it is an undisputed fact that the matter as regards factual position of the case had attained its finality with the order of Tribunal dated 28.11.2014 by which it had dismissed the appeal filed by Revenue and learned DR had not placed any mater....
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....roneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. The Hon'ble Supreme Court has also made clear that the phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial to the interest of the Revenue. It was further stated that when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the CTT does not agree, it cannot be treated as an erroneous order pre....