TMI Blog2013 (5) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... committed by the revisional authority, certainly there is no iota of evidence to show how it is prejudicial to the interest of the revenue. On the contrary the assessee has demonstrated that in no event the order passed by the Assessing Officer is prejudicial to the interest of the revenue. That aspect has not been considered and there is no reference to that aspect in the entire order passed by the revisional authority and by a cryptic order, the matter is remanded to the Assessing Authority - Though the Tribunal was not expected to go into the merits of the case, in order to demonstrate that the order passed by the Assessing Authority even if it is erroneous, is not prejudicial to the interest of the revenue, they have set out computatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.1,04,30,425/-. Thereafter, the assessee purchased another property at Koramangala. The Assessing Officer computed the income from the long term capital gains at Rs.22,17,940/- for the sale of the property. However, the assessee was exempted from paying tax since the fund was utilized fully towards purchase of another property at Koramangala. The Commissioner of Income Tax issued notice under Section 263 of the Act stating that the Assessing Officer was not justified in treating the sale as long term capital gain and according to him, it should have been treated as short term capital gain. The assessee filed his reply to the show cause notice. Thereafter, the Commissioner proceeded to pass the order setting aside the order of assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the revisional authority while exercising power of revision, could have passed a final order on merits, but it also has discretion and the power to remand the matter for fresh consideration to the Assessing Authority. That cannot be found fault with and therefore he submits that a case for interference is made out. 5. Per contra, the learned counsel for the assessee submitted supported the impugned order. 6. The power of revision conferred under Section 263 of the Act on the Commissioner has to be exercised strictly in accordance with law. After reviewing the case law, this court had an occasion to set out the scope of the revisional power in the case of COMMISSIONER OF INCOME TAX v/s M/S.DIGITAL GLOBAL SOFT LIMITED in ITA No.30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. In this background, if we look into the facts of the case, as the provisions of Section 155(14) was not in the statute book on the day the Assessing officer passed the order, coupled with the scope of his power under Section 154, the order passed on 12.06.2001 cannot be strictly in accordance with law. It is erroneous. The amendment came into effect only from 01.06.2002. but on the day the Commissioner was exercising his power and passing the order on 31.07.2002, the said amendment was very much in the statute book. Therefore, on 31.07.2002, when revisional jurisdiction was exercised, the Commissioner could not have held that the order passed by the Assessing Authority is erroneous, as on that day the amended law provided for such re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. After declaring that the order is prejudicial, it refers to the notice being issued to the assessee and the assessee filing reply to the said notice and then review authority feels that it is a matter to be readjudicated by the Assessing Authority and therefore, the matter was remanded for fresh consideration. This is not the way, the revisional authority should exercise their power under Section 263 of the Act. The order of revisional authority should indicate the error committed by the Assessing Authority and consequential prejudice caused to the revenue because of the erroneous order. Unless these two conditions exist, the revisional authority does not get jurisdiction to pass any order under Section 263 of the Act. Once these tw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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