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2020 (12) TMI 24 - HC - Income TaxRevision u/s 263 - Deduction of rupees 1 crore u/s. 54EC denied - CIT directed the assessing officer to disallowed the deduction to the extent of rupees 50 lakhs holding that the phrase “during any financial year” means during any financial year after the first day of April 2007 and the intention of law was to identify any one of the financial years following 1.4.2007, and did not intend to include therein more than one financial year simultaneously? - HELD THAT:- Twin conditions are required to be satisfied for exercise of revisional jurisdiction under Section 263 of the Act. Firstly, the order of the Assessing Officer is erroneous and secondly, that it is prejudicial to the interest of the revenue on account of error in the order of assessment. The aforesaid provision was considered by the Supreme Court in ‘MALABAR INDUSTRIAL COMPANY VS. CIT’, [2000 (2) TMI 10 - SUPREME COURT] and it was held that the phrase ‘prejudicial to the interests of the revenue’ has to be read in conjunction with an erroneous order passed by the Assessing Officer and every loss of revenue as a consequence of the order of the Assessing Officer cannot be treated as prejudicial to the interest of revenue. It was further held that where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, the order passed by the Assessing Officer cannot be treated as erroneous order prejudicial to the interest of the revenue. If the facts of the case in hand are examined, it is axiomatic that the view taken by the Assessing Officer was one of the possible views. Therefore, the Commissioner of Income-Tax has not rightly invoked the powers under Section 263 of the Act.- Decided in favour of the assessee.
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