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2014 (6) TMI 75 - ITAT JODHPURPower of revision u/s 263 of the Act - Prejudicial to the interest of revenue – Proper enquiry made by AO – Reply with documentary evidences furnished by assessee – Held that:- An order can be revised only and only if twin conditions of ‘error in the order’ and ‘prejudice caused to the Revenue’ co-exist - the CIT does not have unfettered and unchequred discretion to revise an order - The CIT is required to exercise revisional power within the bounds of the law and has to satisfy the need of fairness in administrative action and fair play with due respect to the principle of audi alteram partem as envisaged in the Constitution of India as well as in section 263 - an order can be treated as ‘erroneous’ if it was passed in utter ignorance or in violation of any law, or passed without taking into consideration all the relevant facts or by taking into consideration irrelevant facts - The ‘prejudice’ that is contemplated u/s 263 is the prejudice to the Income Tax administration as a whole. Section 263 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer and it is only when an order is erroneous, that the section will be attracted - Every loss of revenue cannot be treated as prejudicial to the interest of the revenue and if the AO has adopted one of the courses permissible under law or where two views are possible and the AO has taken one view under with which the CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the AO is unsustainable under the law – thus, there is no error in the order which can be said to be prejudicial to the interest of the revenue – Decided in favour of Assessee.
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