Dismissing the appeal of the revenue the Court held that the Tribunal recorded a finding that the assessments for the relevant assessment year relating to the two trusts were carefully scrutinised by the Assessing Officer after calling for the details and examining them. The Commissioner having expressed his suspicion about the genuine nature of the transactions between the assessee and the trusts, had not exercised his revisional powers under section 263 with regard to the assessments pertaining to the two trusts completed under section 143(3) of the Act. The action of the Commissioner thus suffered from inherent contradiction. The foremost requirement that the order must be erroneous for invoking the revisional jurisdiction under section 263 by the Commissioner, had not been satisfied. ( AY.1987-88)
CIT v. V. Dhana Reddy And Co. (2018) 407 ITR 96 (T&AP) (HC)
S. 263 : Commissioner – Revision of orders prejudicial to revenue –Rental income whether assessable as property income or business income -No findings had been rendered by the Commissioner that the Assessing Officer had made an incorrect assessment of facts or incorrect application of law –Revision is held to be not valid .[ S.22, 28(i) ]