Jurisdiction u/s 263 can invoke only when an erroneous decision made by AO sustains: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) comprising Shri N K Billaiya, AM and   Shri NK Choudhry, JM has held that jurisdiction u/s 263 of the Income Tax Act can invoke only when an erroneous decision made by AO arises or sustain.

The assessee challenged the assumption of jurisdiction by the PCIT u/s 263 of the Income-tax Act, 1961. The assessee stated that the Assessing Officer, during the course of assessment proceedings u/s 143(3) of the Act, has raised specific queries relating to the cash deposit after demonetization and has made detailed enquiries, for which the assessee has submitted a detailed reply along with supporting documentary evidence and argued that the assessment order is not erroneous and prejudicial to the interest of the Revenue

 In contra, the revenue supported the order of the PCIT. It was contended that merely raising queries does not mean that the Assessing Officer has made sufficient enquiry

It was observed that the prerequisite for the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. Further stated that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, only when an order is erroneous that the section will be attracted.

The Tribunal while allowing the appeal set aside the order of CIT(A) and held that the assessment order cannot be erroneous and prejudicial to the interest of the Revenue in light of the documentary evidence. Shri G.S. Girewal & Ms Reema Girewal appeared on behalf of the assessee and Shri Ishtiyaque Ahmed appeared on behalf of the revenue.

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