TMI Blog1984 (3) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 5, 1979, completed the assessment (Ext. A) enhancing the declared income of the petitioner to Rs. 3,05,582 or Rs. 3,05,580 and issued to him a demand notice thereto under the Act. Against the said order of the ITO, the petitioner has filed an appeal under s. 246 of the Act before the Appellate Assistant Commissioner (hereinafter referred to as the " AAC ") of Income-tax, Range-I, Bangalore, challenging it on diverse grounds. Even before the AAC could hear the said appeal, the Commissioner of Income-tax, Karnataka-II, Bangalore (hereinafter referred to as the " CIT "), by his notice No. L.Rev. No. 3178-II, dated May 27, 1975 (Ext. B), proposed to suo motu revise the said assessment order made by the ITO under s. 263 of the Act, the vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the root of the matter, it is necessary to examine the same first and then deal with the merits, if it becomes necessary. As seen earlier, the petitioner approached this court challenging the very show-cause notice issued by the CIT and sought for stay of further proceedings in pursuance of the same. On June 14, 1978, this court, while issuing rule nisi, notified the CIT and made an interim order on July 14, 1978, permitting him to pass his final order with a direction not to issue any demand notice without the leave of this court. Evidently, this court made that interim order on July 14, 1978, to safeguard the possible interests of the Revenue. But, that interim order and any further order made in pursuance of that order itself cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be invoked by the CIT only when he prima facie finds that the order made by the ITO was erroneous and was prejudicial to the interests of the Revenue. Both these factors must simultaneously exist. An order that is erroneous must also have resulted in loss of revenue or prejudicial to the interests of the Revenue. Unless both these factors co-exist or exist simultaneously, the CIT cannot invoke or resort to s. 263 of the Act. Section 263 cannot be exercised to correct every conceivable error committed by an ITO. Before the suo motu power of revision can be exercised, the Commissioner must at least prima facie find that both the requirements of s. 263 of the Act, namely, that the order sought to be revised was prima facie erroneous and preju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the ITO, which was not prejudicial to the interest of the Revenue, was not open to correction by the CIT under s. 263 of the Act for which reason, the impugned notices and the final order made by him on that basis are also liable to be quashed. Before this court, the petitioner had stated that the appeal filed by him before the AAC was pending awaiting the decision of this court in this case. But, if for any reason, the AAC has already disposed of that appeal, it is proper for the AAC to restore that appeal to its original file and dispose of the same on merits. In the light of my above discussion, I quash the impugned notice and the final order dated January 4, 1982. Rule issued is made absolute. But, in the circumstances of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
