2019 (1) TMI 1965

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.... the letter dated 18.08.2016, which is reproduced as under: No. JT.CIT/R-2/Dgp./Revision/ 2016-17/571                                                                                                     Dated 18.08.2016 To 1. The ACIT, Circle-2, Durgapur 2. The ITO, Ward-2(1), Durgapur 3. The ITO, Ward-2(2), Durgapur Aayakar Bhawa....

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....l ensuring the conditions laid down in explanation 2 of provision of section 263 of the Act. The Explanation 2 of section 263 of the Act is given below for ready reference. "Explanation 2.- For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner,- (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction ....

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....ing under the Act and if he considers that any order passed therein by the AO is erroneous in so far as prejudicial to the interest of the revenue, he may after giving opportunity of being heard to the assessee pass orders as prescribed under the Act. So, the power vested in the CIT is that of revisional jurisdiction to interfere with the order of AO, if it is erroneous in so far as prejudicial to the revenue and, therefore, the power to exercise the revisional jurisdiction is vested only with the Pr. Commissioner/Commissioner if he considers the order of the AO to be erroneous in so far as prejudicial to the interest of the revenue. Therefore, this power is vested with the Pr. CIT/CIT to exercise revisional jurisdiction is only when he con....

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.... u/s. 263 of the Act by the CIT. Therefore, the appeal filed by the assessee is allowed." Since the department could not controvert the contents of the letter of the JCIT(supra) dated 18.08.2016 which clearly brings out that ld. PCIT has called for proposal from JCIT/Assessing Officer to exercise the jurisdiction u/s 263. It means the ld. PCIT has not exercised the jurisdiction u/s 263 himself but he exercised the jurisdiction at the instance of the A.O. / JCIT which is against the provision of law. The power of revisional jurisdiction is vested only with the ld. PCIT. Therefore we note that the exercise of the jurisdiction u/s 263 of the Act itself is not in accordance with law hence we cancel the order passed by ld. PCIT u/s 263 of the....