Covers s.263, s.143(3), s.147, s.154, s.148, s.264, s.143(1), s.43B and 11 more. 36 entries, strongest first, with what each one decided in a sentence. Read down the list, then open the entry that fits your facts. The Revision & Rectification hub cross-lists everything that touches this area, including entries filed under another subject.
The Assessing Officer allowed a deduction. Does the fact that a view was taken protect the assessment from section 263? Only if the view taken is one of two views genuinely open on the law. Where the Supreme Court is satisfied the assessment is both erroneous and prejudicial, the Commissioner's revision stands and the Tribunal and High Court orders setting it aside go.
Can the Commissioner revise on a ground that was not in the show cause notice? Yes. Section 263 requires an opportunity of hearing, not a formal show cause notice, and the Commissioner is not confined to the issues listed in any notice. What he must give you is a full chance to answer before he finalises.
The Assessing Officer passed the assessment after being told what to do by the Commissioner. What happens to that assessment, and to a later section 263 order on it? An assessment passed on the dictates of a higher authority is without jurisdiction and a nullity. And a Commissioner exercising section 263 cannot use that order to direct reopening of other assessment years; his revisional jurisdiction is confined to the year before him.
What if the law itself was unsettled when the officer decided? Reported as following the two-views principle — where the provision was capable of more than one interpretation and the officer adopted one of them, revision under s.263 does not lie.
A reassessment was done in between. Does the two-year clock for s.263 restart from it? Not for an item the reassessment never touched. For that item, limitation runs from the ORIGINAL assessment order, because the doctrine of merger does not apply where the subject matter is different.
The department accepted a High Court decision in someone else's case and never appealed it, and is now arguing the opposite against my client. Can it? Not without just cause. The Supreme Court held that if the Revenue has not challenged the correctness of the law laid down by a High Court and has accepted it in the case of one assessee, it is not open to the Revenue to challenge its correctness in the case of other assessees, without just cause. The Gujarat High Court in Lakhanpal National Ltd had held that the whole of the excise and customs duty actually paid in a year is deductible under section 43B irrespective of how much of it is embedded in closing stock; that decision was never challenged, was followed by the Bombay and Madras High Courts and by a Special Bench of the Tribunal, and none of those was challenged either. The Court found no just cause for a departure, held that the Commissioner, the Tribunal and the Calcutta High Court had erred in permitting the Revenue to contend to the contrary, set aside the Calcutta High Court's judgments for all three assessment years and answered the questions in favour of the assessee.
The Commissioner wants to revise my assessment. What does he actually have to establish? Both things, not one. The order must be erroneous AND prejudicial to the revenue. If the officer took one of two possible views, that is not an error.
The Commissioner has issued a notice under section 263 on the strength of a Departmental Valuation Officer's report that reached the Assessing Officer only after my assessment was over. Can he revise on material that was not on the file when the order was passed? Yes, on these facts. The Supreme Court held that it was open to the Commissioner to take into consideration all the records available at the time of examination by him, and so to consider a valuation report that the Departmental Valuation Cell submitted after the assessment order had been passed. The Court read clause (b) of the Explanation to section 263(1), which declares that 'record' shall include and shall be deemed always to have included all records relating to any proceeding under the Act available at the time of examination by the Commissioner, and held that the Commissioner may look not only at the record of that proceeding but at the record relating to it. It also held that the narrower reading had never been the settled law, even for orders passed before the 1988 amendment.
Can an assessment be revised where the officer taxed income that was never yours? Yes. An assessment made merely because the assessee wanted the amount taxed in her hands, to help someone else escape a larger assessment, can be erroneous and prejudicial to the revenue — and may be cancelled in revision.
The Commissioner's show cause notice before revising my assessment was defective. Does that knock out his jurisdiction to revise at all? No. The Supreme Court held that the revision section, unlike the reassessment section, prescribes no notice at all. It requires only that the Commissioner give the assessee an opportunity of being heard before he reaches his decision, not before he begins the enquiry. That requirement belongs to natural justice, not to jurisdiction. A breach of it may make the resulting order illegal, but it does not take away the Commissioner's power to proceed. Since no notice was a condition precedent, the question what the notice should have contained did not arise. The Calcutta High Court's contrary view was set aside.
What actually counts as a 'mistake apparent from the record' under s.154? An obvious and patent mistake. Not one that must be established by a long drawn process of reasoning on points where two opinions are conceivable. A decision on a debatable point of law cannot be rectified.
The Commissioner set aside my assessments in revision relying on enquiries he never showed me. Is his order bad for want of a fair opportunity? No, on these facts. The Supreme Court dismissed the appeal. The Commissioner had used material from his own enquiries which was never put to the assessee, but the Court held that this was supporting material and not the basic ground of the order. On the face of the record the assessments were prejudicial to the revenue: a new assessee had filed nine years' voluntary returns at once, her own declaration about initial capital, marriage ornaments and gifts should have put any officer on his guard, no books or bank account existed, and short stereotyped orders followed within days without any enquiry.
The Commissioner dismissed my revision and the officer will not issue a demand notice so I cannot appeal. Is the revisional order beyond the reach of a writ because it is administrative? No. The Supreme Court held that the revisional jurisdiction is prima facie judicial: the order brought before the Commissioner affects the assessee's rights, it is implicit in a revisional power that the parties be heard, and the nature of the jurisdiction carries with it a duty to act judicially. Certiorari therefore lies. And even if the revisional order were administrative, that would not help the Revenue, because the officer's failure to issue the statutory demand notice would still be a failure of a statutory duty, correctable by mandamus. The Court quashed the revisional order and directed the officer to pass an order and issue notice according to law.
The assessee did not appear before the Commissioner in the revision proceedings. Does that alone justify the revision order? No. Non-appearance before the Commissioner does not convert an assessment made after specific queries and full replies into an order passed without enquiry. The Commissioner still has to make his own enquiry and satisfy both conditions, and prejudice to the revenue must actually exist.
The Commissioner has issued a s.263 notice saying the transferor companies had not been in business for three years, so the losses we took over cannot be carried forward. Our arrangement was a demerger, not an amalgamation. Does the three-year condition apply? No. The three-year condition is in s.72A(2), which governs amalgamation. A demerger is governed by s.72A(4), which contains no such condition. The Madras High Court held that a revision order built on the wrong sub-section, and which merely remitted the matter to the assessing officer for enquiry, did not satisfy the requirement that the order sought to be revised be erroneous.
You signed an APA and filed a modified return under s.92CD. The Commissioner has now issued a s.263 notice on the old assessment order. Can he? Not on this reasoning. Once a modified return is filed under the APA it has to be treated as a return filed under s.139, and the earlier return and earlier assessment order lose their efficacy for all practical purposes; a fresh assessment order is what has to be passed. Allowing the s.263 notice on the superseded order to run would make the APA and the modified return inconsequential, and nothing stops the Assessing Officer from taking the very same points while re-scrutinising the modified return. Both writ petitions were allowed and the show cause notices set aside.
The Commissioner says my assessment was made without any inquiry. Is that by itself enough to revise it under s.263? It depends on which side of the line the file falls. The Delhi High Court restored a revision because the officer had accepted the claim that the land sold was agricultural without verifying it at all. The twin conditions still have to be met, but a complete absence of inquiry satisfies the first of them; an inquiry the Commissioner merely thinks was too thin does not.
How much work must the Commissioner do before he can hold an assessment erroneous and prejudicial? At least a minimal enquiry, and he must record the reasons for his conclusion. A revision order that does not engage with the reply to the show cause notice and does not record why the assessment is erroneous is not sustainable in law.
I left a legitimate deduction out of my return and the assessment is over. Can the Commissioner allow it under s.264? Yes. The Bombay High Court held that s.264 confers wide jurisdiction, that it is not confined to correcting the errors of subordinate authorities, and that it covers a claim the assessee failed to make in the return and discovered only later. The rejection was quashed and the Commissioner was directed to decide the application afresh, by a reasoned order, after a hearing.
The Commissioner did not mention Explanation 2 in the show cause notice but relied on it in the revision order. Does that matter? Yes. The Tribunal held, and the High Court and Supreme Court left undisturbed, that invoking Explanation 2 in the order without having put it to the assessee in the show cause notice is not appropriate or sustainable in law. On the merits, the Assessing Officer had made full inquiries into the loans and taken a plausible view, so there was nothing to revise.
The Commissioner has issued a section 263 notice raising issues the reassessment never touched. Does the two-year limit run from the reassessment order or from the original assessment, and can I challenge the notice itself? From the original assessment, and yes. The Madras High Court held that where a section 263 notice raises issues that were not the subject matter of the reassessment, the two years in section 263(2) run from the end of the financial year in which the original assessment was passed, not the reassessment. Here scrutiny assessment was made on 25 February 2015, so time ran from 31 March 2015, and the notice of 16 August 2017 was out of time. Being barred by law, the notice suffered from lack of jurisdiction, and the settled principles allow a show cause notice to be assailed on that ground. The writ appeal was allowed and the notice quashed.
I made a mistake in my own return and paid tax I did not owe. The time to revise has gone. Can the Commissioner give me relief under section 264? Yes. The Delhi High Court held that the revisional power under section 264 is very wide and is not confined to correcting the officer's errors - it extends to errors made by the assessee, including a legitimate claim never made in the return and raised for the first time in the revision application. An intimation under section 143(1) is an "order" for section 264. Paying the Rs.500 fee late is a curable irregularity, not a bar. The Commissioner's rejection was set aside and the revision restored for fresh consideration on merits.
The Commissioner says the Assessing Officer's inquiry was not deep enough. Can he set the assessment aside and tell the officer to inquire further? No. Where inquiry was made but the Commissioner thinks it insufficient, the Commissioner must conduct the inquiry himself and record a finding that the order is erroneous. He cannot remit the question of whether the order is erroneous to the Assessing Officer.
The Commissioner has set aside my assessment under section 263 saying the Assessing Officer did not examine an issue properly — can he do that without deciding the issue himself? No. The Delhi High Court held that a finding that the assessment order is erroneous is a jurisdictional precondition for section 263. Where the Assessing Officer has made an enquiry but the Commissioner thinks it inadequate, the Commissioner must himself examine or verify the matter and record a clear finding, supported by reasons, that the order is erroneous and unsustainable in law. He cannot remit the matter for the Assessing Officer to find out whether the order was erroneous. The revision order here, which said only that the point had not been properly examined, was rightly cancelled and the Revenue's appeal was dismissed.
The Commissioner has issued a section 263 notice saying my assessment order does not discuss a deduction the officer allowed. Is a brief order by itself erroneous? No. The Bombay High Court held that an order is erroneous only if it is not in accordance with law, or was passed without any enquiry in undue haste. Where the officer raised a query, got a written explanation and allowed the claim on it, his order cannot be branded erroneous merely because he did not discuss the matter elaborately or because the Commissioner would have decided differently. And the Commissioner must himself reach a finding that the order is erroneous and prejudicial before he sets it aside; he cannot simply remit the point for the officer to look at again.
The Commissioner has revised your assessment for a year before AY 2024-25 saying the officer never verified MSME trade payables. Can s.43B(h) support that? No. Clause (h) of s.43B was inserted by the Finance Act 2023 with effect from 1 April 2024 and operates prospectively from AY 2024-25. For AY 2022-23 the Tribunal held the Commissioner could not found prejudice to the Revenue on the non-application of a provision that did not apply, and set the s.263 order aside.
I declared my interest in a foreign discretionary trust under s.59 and the assessment accepted it. Can the Principal Director now revise that order? Not where the point was examined at the assessment stage. The Tribunal set aside a revision under s.23 of the Black Money Act, holding that an order passed after due enquiry and verification is neither erroneous nor prejudicial to the interest of the Revenue within s.23(2) and cannot be called prejudicial under s.23(9). It also records the valuation route for a beneficiary's interest in a foreign trust: the trust's assets are valued as an association of persons under Rule 3(1)(g), with the shares held by the trust valued first under Rule 3(1)(c).
An internal audit objection has produced a s.263 notice saying CSR spending is not voluntary and so is not a 'donation' at all for s.80G. Does that argument let the Commissioner revise my assessment? No, not while the point remains genuinely open. The Tribunal held that the eligibility of CSR expenditure for s.80G is a question on which Benches differ — the Bangalore and Kolkata Benches allow it, the Delhi Bench in Agilent Technologies disallows it — so an Assessing Officer who allows it has adopted one of two reasonably possible views and the s.263 jurisdiction does not arise.
The Commissioner has revised our assessment under section 263 saying the scheme was an acquisition and not a demerger, so the section 72A(4) losses go. What did the Tribunal make of that argument? The Tribunal allowed the assessee's appeal. It held that the Principal Commissioner had drawn his inferences without taking cognizance of the Composite Scheme of Arrangement on the record, that a scheme of arrangement approved by the court carries the force of a statute, and that a restructuring in the telecom sector could not be branded an exercise to claim set-off of brought forward losses by a bald allegation. It recorded that section 2(19AA) refers to the provisions of the Companies Act for determining whether there is a demerger, and that the basic requirement for eligibility under section 72A(4) is that the transfer of the undertaking be in pursuance of a scheme of arrangement under the Companies Act by the demerged company. On the facts it found that the demerged company had been engaged in the consumer wireless mobile business, had been incurring loss since inception, that the entire business loss related to that undertaking alone, and that all the assets and liabilities relating to the demerged business had been transferred and vested in the assessee.
The Principal Commissioner has revised my client's assessment under section 263 because no accountant's report was filed with the section 35AD claim for its agricultural warehouse. The section itself says nothing about a form. Can the revision stand? On this Tribunal's view, yes. On 31 July 2024 the ITAT Ahmedabad held that section 35AD(7), which applies section 80A(6) and section 80-IA(7) and (10) to section 35AD in respect of goods, services or assets held for the specified business, carries with it the obligation to furnish the report required by section 80-IA(7); and that an assessee claiming section 35AD is "required under law to furnish requisite form, duly certified by Chartered Accountant in terms of Section 80-IA(7) of the Act". The assessee, a firm operating a warehousing facility for storage of agricultural produce, had claimed Rs 7,75,12,899 under section 35AD for AY 2017-18. The Principal Commissioner revised the assessment under section 263 on the ground that no report in Form No. 10CCB had been filed and that the Assessing Officer had neither called for it nor verified it. The assessee's answer was that Form 10CCB and rule 18BBB make no reference to section 35AD, and that the auditors had certified the deduction in Form 3CD. The Tribunal did not decide whether the filing is mandatory or merely procedural. It rested on the failure to enquire: no specific query about the section 35AD claim had been raised in the assessment, the claim was substantial, and the Assessing Officer had not enquired whether the requisite form had been furnished. On that ground it held that the assessment order was erroneous in so far as it was prejudicial to the interests of the Revenue.
The Commissioner has revised my client's assessment under s.263 saying he should have followed percentage of completion. The year is before AY 2017-18. Is that revision good? No. The Tribunal held that percentage of completion became mandatory for revenue recognition only from 1 April 2017, that is AY 2017-18, by the insertion of s.43CB, and that this method was not mandatory or compulsory for AY 2013-14; the Commissioner therefore could not revise or revisit the assessment order by pressing s.43CB into service. It quashed the s.263 order, the s.263 notice and all proceedings and orders passed in pursuance of it.
The Commissioner has issued me a s.263 notice saying the Assessing Officer should have referred my s.40A(2)(b) payments to the TPO. Clause (i) of s.92BA was omitted in 2017. Can he still revise? No. Clause (i) of s.92BA was omitted by the Finance Act 2017 with effect from 1 April 2017 without any saving clause, and an omission is not a repeal, so s.6 of the General Clauses Act does not preserve anything built on it. The Tribunal held the provision must be treated as never having existed, and the Commissioner's revision order founded on a failure to refer specified domestic transactions to the TPO was quashed, the jurisdiction exercised being, in the order's own register, null in the eye of law.
The Commissioner has revised my co-operative society's assessment under s.263 because AMT on adjusted total income came out higher than the normal tax. The department's working grossed up my total income by the s.80P deduction. Is that right? It is not. Clause (i) of s.115JC(2) requires total income to be increased by deductions claimed under any section "other than section 80P" included in Chapter VI-A under heading C. The Assessing Officer's internal working had added back the s.80P deduction of Rs.56,16,242, producing an adjusted total income of Rs.1,13,55,916 instead of the correct Rs.57,39,674; on the correct figure the AMT was lower than the normal tax, so there was no prejudice to the Revenue and no ground for revision.
The Commissioner has revised my assessment saying no inquiry was made, but the officer did ask about the very item. Is that revision good? No, on this Tribunal's view. The Delhi Bench quashed both revision orders because the Assessing Officer had put the point on the interest adjusted against project expenditure, the company had explained it and the officer had accepted the explanation - so there was an enquiry - while the Principal Commissioner made no independent enquiry of his own. The order also records, at para 13, a Mumbai Bench observation and a Delhi Bench decision that Explanation 2 to s.263 is prospective, but it states no view of its own on that, so this is not authority for the prospectivity point.
The Commissioner has revised my assessment under s.263 saying the Assessing Officer never examined AMT. My only deduction is under s.10A. Does s.115JC even apply to me? It does not. Section 115JC(2) is a closed list: adjusted total income is the total income increased only by deductions under Chapter VI-A heading C other than s.80P, by a deduction under s.10AA, and by a deduction under s.35AD net of the notional depreciation. A deduction under s.10A is not in that list, so where that is the only claim the provisions of s.115JC are clearly not applicable and the Assessing Officer was under no duty to enquire into them.
After Explanation 2 to s.263, can the Commissioner revise simply by saying the enquiry was not thorough enough? No. Explanation 2 is clarificatory and does not dilute the basic requirements of s.263(1). Revision needs a gross inadequacy of enquiry, or an enquiry the record demanded and which was simply not made.
Nothing here is written from memory. Every entry was found through a search, and the page for it links to where it was found, so you can check it rather than take our word for it. What has not happened yet is the part that matters most: nobody has read the certified copy of each judgment and signed off the summary against it. Until that is done, each page says Not yet CA-verified, and it means exactly what it says. Read the source before you rely on an entry in a reply to an Assessing Officer or in an appeal.
