2020 (2) TMI 711

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..... iled his return of income by offering the income for taxation, therefore he rectified his order on 14/06/2018. We find that ld.Commissioner is not able to establish what the prejudice is caused to the Revenue in the rectification order passed by the Assessing Officer. To invoke section 263, both the conditions have to be fulfilled i.e. order passed by the Assessing Officer not only erroneous but also prejudicial to the interest of the Revenue. In the present case, ld.Commissioner not able to establish that the order passed by the Assessing Officer is prejudicial to the interest of the Revenue, therefore it is not a fit case to invoke section 263. Accordingly, the order passed by the ld.Commissioner is reversed and restore the order of the A .....

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..... ted by the NRI. Therefore, requested to rectify the order passed u/sec. 201(1) 201(1A) dated 30/03/2018. The Assessing Officer after considering the explanation of the assessee rectified the order on 14/06/2018 wherein he categorically mentioned that assessee need not to pay any tax. Subsequently, the Commissioner by exercising his powers conferred in him u/sec. 263 set aside the rectification order on the ground that order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue by observing as under:- 14.2 ...... As stated earlier Sec. 195 of the Income-tax Act, mandates deduction of tax in case of payments made to a non-resident at the time of credit of such income at the rates in force. The sec. .....

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..... by the AO is valid order. The rectification order passed by the AO subsequently, wherein the claim of the assessee was accepted and the demand raised under Sec. 201(1) and 201(1A) was reduced to Nil, is erroneous and prejudicial to the interest of the revenue. Hence I hold that the order u/s 154 dated 14-06-2018 passed by the AO is to be cancelled. The AO is directed to restore the original order finalised u/s 201(1) and 201(1A) of the Act. 3. On being aggrieved, assessee carried the matter in appeal before this Tribunal. 4. Ld. counsel for the assessee has submitted that the order passed by the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue, therefore 263 order passed by the ld.Commissioner .....

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