2024 (1) TMI 371

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....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 Assessing Officer passed fresh order under Section 143(3) of the Act, recording....

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.... 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 Section 263 of the Act; and that where the Income Tax Officer adopts one of the courses perm....

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....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 assessing officer has taken one view with which the Commissioner did not agree. (See CIT v. Arvind Jewellers.) 9....

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.... 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 words, but this does not satisfy the requirements under Section 263 of the Act. Order under Section 263 must be clear and must set out lo....