TaxTMI 
TaxTMI 
2024 (1) TMI 371
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....g to the Assessment Year 2016-17 filed by the present respondent/assessee was allowed. Having heard learned counsel for the appellant/revenue, we found it not to be a fit case for issuance of notice. 2. Briefly stated, circumstances relevant for present purposes are as follows. On 15.10.2016, the respondent/assessee filed its return of income for Assessment Year 2016-17, declaring its income as Rs. 12,85,64,070/- and the Assessment Order under Section 143(3) of the Act was passed on 07.12.2018. 2.1 However, on 17.03.2021, the Principal Commissioner Income Tax ("PCIT") cancelled the said Assessment Order, invoking Section 263 of the Act and directed the Assessing Officer to pass fresh Assessment Order. Accordingly, on 27.03.2022, the A....
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....ifiable. However, learned counsel for appellant/revenue did not dispute that order under Section 263 of the Act did not at all deal with the submissions of the respondent/assessee in reply to the show-cause notice. 4. At this stage, it would be apposite to briefly refer to the legal position pertaining to Section 263 of the Act. 4.1 In the case of Commissioner of Income Tax (Central) Ludhiana vs Max India Ltd., (2007) 15 SCC 401, the Supreme Court referred to its earlier judgment in the case of Malabar Industrial Company Limited vs CIT, (2002) 2 SCC 718 and reiterated that every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of revenue within the meaning of Sectio....
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.... such a power by the Commissioner, which are: (i) the order of the assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. (See Malabar Industrial Co. Ltd. v. CIT) 8. At the same time, this Court has also laid down that this provision cannot be invoked to correct each and every type of mistake or error committed by the assessing officer. While interpreting the expression "prejudicial to the interests of the Revenue", it is also held that order of the assessing officer cannot be termed as prejudicial simply because assessing officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the as....
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....that one has to keep in mind the distinction between lack of enquiry and inadequate enquiry; and that merely because the enquiry carried out was inadequate, that by itself would not justify invoking Section 263 of the Act. 4.5 In the case of CIT vs New Delhi Television Ltd., (2014) 220 Taxman 43, a coordinate bench of this court examined the provision under consideration herein and observed thus: "In paragraph 6 of the order dated 29th March, 2007, the Commissioner uses the expression "erroneous and prejudicial to the interest of revenue" but does not cite any reason or ground for the said conclusion. Use of the words without elucidation indicates, that the said observations are presumptive or a suspicion and mere repetition of ....
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....rther, according to records, prior to passing the order under Section 263 of the Act, the PCIT had issued show-cause notice dated 15.02.2021, which was duly served on the respondent/assessee. As mentioned in the order under Section 263 of the Act, on behalf of the respondent/assessee, not just written submissions in response to the show-cause notice were filed but even a chartered accountant and an advocate on behalf of the respondent/assessee attended hearings. But in the order under Section 263 of the Act, the PCIT did not even whisper about the contents of reply to show-cause notice, what to say of holding any enquiry. In the name of dealing with the reply to show-cause notice, the PCIT simply observed that on behalf of the respondent/as....