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2024 (2) TMI 335 - AT - Income TaxRevision u/s 263 - CIT setting aside the assessment order and directing to frame fresh assessment order on the issues of Interest accrued but not paid to Power Finance Corporation (PFC), claim of Bad Debts and provision on account of leave encashment - HELD THAT:- As clearly evident from the findings of the Ld. PCIT, as noted above by us, that in very clear terms he stated to be satisfied with the explanation of the assessee regarding the irregularities noted by him in the assessment order and for which purpose he assumed jurisdiction u/s 263 of the Act for revision of the assessment order. It is but obvious that as per PCIT himself there was no error in the assessment order in allowing the above claims to the assessee - PCIT was satisfied that these claims had been rightly allowed to the assessee on the basis of the assessee’s explanation and the documents filed before him. When the ld. PCIT himself was satisfied that there was no error in the order of the Assessing Officer vis-à-vis irregularities noted by him initially, there can be no case for exercising any revisionary power u/s 263 of the Act. The provisions of the section are very clear. The concerned authorities can exercise revisionary powers only on fulfillment of the essential conditions of finding error in the order sought to be revised and the error being such as causing prejudice to the Revenue. In the absence of any of the two conditions the power of revision u/s 263 of the Act cannot be exercised. See Malabar Industrial Co. Ltd. Vs. CIT [2000 (2) TMI 10 - SUPREME COURT] . In the present case, with the ld. PCIT’s recording of satisfaction vis-à-vis explanation of the assessee regarding the alleged errors noted by him in the assessment order, it can be safely said that as per the ld. PCIT, there was no error in the assessment order. And having found no error in the assessment order himself , there was possibly no scope of the issue being examined again by the AO, an officer junior in Rank to the Ld. PCIT. There was no case therefore, we hold, for the Ld. PCIT to exercise any revisionary power u/s 263 of the Act on the issue. Merely because the Assessing Officer had not examined these issues during assessment proceedings does not make the assessment order erroneous particularly when the ld. PCIT finds, on the basis of explanation and documents furnished to him, that the assessee’s claim was eligible as per law - Appeal of the assessee is allowed.
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