Law:

Section:

I. Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue - Assessment year 1995-96 - Every loss of revenue as a consequence of an order of Assessing Officer cannot be treated as prejudicial to interests of revenue [In favour of assessee] The phrase 'prejudicial to the interests of the revenue' under section 263 has to be read in conjunction with the expression 'erroneous' order by the Assessing Officer. Every loss of the revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue. II. Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue - Assessment year 1995-96 - If in given facts and circumstances of a case, two views are possible and one view has been adopted by Assessing Officer, then that view alone would not be sufficient to exercise powers under section 263 by Commissioner [In favour of assessee] Under section 263 the Commissioner has power to call for and examine the record of any proceedings under the Act, provided he is of the opinion that the order is erroneous one insofar as it is prejudicial to the interests of the revenue. Only thereafter notices can be issued to the assessee so as to call for his objections. If in the given facts and circumstances of the case, two views are possible and one view has been adopted by Assessing Officer, then that view alone would not be sufficient to exercise the powers under section 263 by the Commissioner. CASE REVIEW CIT v. Shri Ram Honda Power Equip [2007] 289 ITR 475 (Delhi) followed. CIT v. K. Ravindranathan Nair [2007] 295 ITR 228 (SC) and Hero Exports v. CIT [2007] 295 ITR 454 (SC) distinguished. CASES REFERRED TO CIT v. V. Chinnapandi [2006] 282 ITR 389 (Mad.), CIT v. Max India Ltd. [2007] 295 ITR 282 (SC), CIT v. K. Ravindranathan Nair [2007] 295 ITR 228 (SC), CIT v. Shri Ram Honda Power Equip [2007] 289 ITR 475 (Delhi), B. Desraj v. CIT [2008] 301 ITR 439 (SC), Hero Exports v. CIT [2007] 295 ITR 454 (SC), K.S. Subbiah Pillai and Co. (India) P. Ltd. v. CIT [2003] 260 ITR 304 (Mad.), Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC), Rani Paliwal…

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