Twin Prerequisites not followed for Invocation of Revisional Powers u/s 263 of IT Act: ITAT quashes Order

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that no twin prerequisites for invocation of revisional powers under Section 263 of the Income Tax Act, 1961.

M/s. Havells India Limited, the appellant assessee had filed an appeal against the revisional order of the Principal Commissioner of Income Tax which was held to be erroneous and prejudicial to the interest of the revenue.

Shri Akshat Jain, the counsel for the assessee contended that the twin condition for the applicability of Section 263 of the Income Tax Act, 1961 is not fulfilled in the present case.

It was also submitted that a disallowance was proposed under Section 263 of the Income Tax Act as per the Shahenshah Scheme and switched to Section 115BAA of the Income Tax Act and is no longer to be used to avail the carry forward credit.

The counsel for the assessee had filed an affidavit of the assessee company to the effect that it had not availed any tax benefit flowing under Section 115JB of the Income Tax Act applied in the instant assessment year.

T. James Singson, the counsel for the department contended that no prejudice had been caused to the Revenue by claiming an unsustainable provision.

The bench observed that no revenue benefit has been derived from the alleged error in the order and no extra credit had been availed in the later years.

The two-member bench comprising Chandra Mohan Garg (Judicial) and Pradip Kumar Kedia( Accountant) held that the revisional order of the commissioner was set aside on the ground that the twin prerequisites for invocation of revisional powers under Section 263 of the Income Tax Act was not available in the present case while allowing the appeal.

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