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2016 (10) TMI 417 - ITAT KOLKATARevision u/s 263 - erroneous order - genuineness of the unsecured loan - Held that:- In the instant case, the Ld. CIT has not established anywhere in the impugned order that the assessment order of the AO is erroneous as well as prejudicial to the interests of the revenue. The non-compliance with the statutory prescription as evident from the impugned order is a serious infirmity vitiating the validity of the proceedings. In a situation where the Assessing Authority as an adjudicator decides an issue and renders a wrong decision which is unsustainable in law. It can be corrected by the Commissioner in exercise of revisionary power. In such cases, the Ld. CIT has to come to the conclusion and himself decide that the order is erroneous by conducting appropriate enquiry if required and necessary before the order u/s. 263 of the Act is passed. In such cases, the order of the Assessing Authority will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. The jurisdictional precondition stipulated is that the Ld. CIT must come to the conclusion that the order is erroneous and is unsustainable in law. The finding of an "error" is the condition precedent for proceedings u/s. 263 of the Act which is palpably missing in his order and accordingly, the specious conclusion of the Ld. CIT without laying down any basis therefore is totally contrary to law. Therefore, the conditions precedent for invoking the provisions of sec 263 of the Act not having been satisfied, the action of the Ld. CIT of assuming jurisdiction there under is in contravention of the settled position in this regard. In view of above, we hold that the order passed by the ld. CIT is not sustainable in the law and accordingly we reverse the same. Hence the grounds of appeal of the assessee are allowed.
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