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TMI Blog2015 (9) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... flect any reason for the conclusions of the Assessing Officer. These findings of the Commissioner fully justified his conclusion that Annexure A order was erroneous in as much as it is prejudicial to the Revenue. In our view, the findings of the Commissioner satisfies the requirements of section 263 of the IT Act and therefore, the order of the Tribunal confirming Annexure A order of the Commissioner passed under section 263 does not merit interference. - Decided in favour of revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... n the judgment of the Apex Court in Malabar Industrial Co. Ltd. v. Commissioner of Income Tax [(2000) 243 ITR 83], senior counsel for the appellant contended that to invoke the power under section 263 of the IT Act, the twin conditions, that the order of the Assessing Officer being erroneous and prejudicial to the interests of the Revenue, should be established. According to the learned counsel, in this case, this statutory requirement was not satisfied and therefore, the order passed by the Commissioner, as confirmed by the Tribunal, calls for interference. 6. On the other hand, learned senior standing counsel for the Revenue invited our attention to Annexure B order passed by the Commissioner and also the principles laid down, not only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner suo motu under it, is that the order of the Income-Tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent- if the order of the Income-Tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue-recourse cannot be had to section 263(1) of the Act. There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the interests of Revenue administration." In our view, this interpretation is too narrow to merit acceptance. The scheme of the Act is to levy and collect tax in accordance with the provsions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. The phrase "prejudicial to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts the conclusion that the order of the Income-tax Officer was erroneous is irresistible. We are, therefore, of the opinion that the High court has rightly held that the exercise of the jurisdiction by the Commissioner under section 263(1) was justified." 9. This judgment was followed by this Court in the judgment in Appollo Tyres Ltd. (supra). Bearing in mind the principles laid down by the Apex Court and by this Court in the judgments referred to above, we shall now turn to Annexure B order passed by the Commissioner. In this order, the Commissioner has noticed thus: "Later examination of records showed that the assessee had debited ₹ 710.19 lakhs as extra ordinary items being the Pole Rental Charges payable to KSE ..... X X X X Extracts X X X X X X X X Extracts X X X X
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