2022 (11) TMI 1033

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....IT is wrong, illegal and opposed to facts as the order u/s. 143(3) is neither erroneous nor prejudicial to the interest of the Revenue.     2. The CIT failed to note-that the order u/s. 143(3) is under appeal before CIT(A) and hence CIT has no jurisdiction to interfere at this juncture.     3. The CIT went wrong in invoking revisionary proceedings u/s. 263 as the AO has already enquired into the "prior period expenses" and accepted the claim after due enquiry.     4. The AO having seen the details placed before him during the assessment proceedings and having taken one possible view, the CIT can't impose his view over that of the AO.     5. In any event, the CIT went wr....

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....prior period expenses' in the statement of total income, the AO has failed to disallow this inadmissible expenses and thus, opined that the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue. 5. In response to the show cause notice, the assessee submitted that the assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue, because, the AO has considered two issues questioned in the revision proceedings while completing the assessment order u/s. 143(3) of the Act. Therefore, assumption of jurisdiction u/s. 263 of the Act, is incorrect. The PCIT after considering relevant submissions of the assessee opined that assessment order passed by ....

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....in conditions must be satisfied i.e. the order of the AO must be erroneous and further, it should be prejudicial to the interest of the Revenue. In this case, the order of the AO is neither erroneous, because, although in assessment order, the AO has considered loss declared by the assessee in original return of income filed for the relevant AY, but in the tax computation sheet, the AO has considered loss as per revised return filed by the assessee and thus, it cannot be said that assessment order passed by the AO is erroneous. The assessment order passed by the AO is not prejudicial to the interest of the Revenue on both the issues, because, once the assessment order is not erroneous, then it cannot be said that there is prejudicial to the....

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.... record and gone through orders of the authorities below. There is no dispute with regard to legal position in so far as the power of the Ld. CIT/ld. PCIT u/s. 263 of the Act. The Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT (supra), had very categorically held that in order to assume jurisdiction u/s. 263 of the Act, twin conditions must be satisfied i.e. (i) the order must be erroneous and (ii) further, it should be prejudicial to the interest of the Revenue. The various High Courts/Tribunals have taken a consistent view on this legal position and held that unless twin conditions embedded u/s. 263 of the Act, are satisfied, the ld. PCIT, cannot assume jurisdiction and set aside assessment order passed by the....