Assessees filed return of income and thereafter assesses case was selected for scrutiny and assessment was completed under section 143(3) of the Act. PCIT noticed that in course of assessment proceedings, certain additions and disallowances were not examined by the AO properly hence treated order erroneous as well as prejudicial to interest of revenue and directed AO to make fresh assessment.

On Assessees appeal to Tribunal, it was noted by the Tribunal that on perusal of PCIT’s order it was clear that PCIT had exercised jurisdiction under section 263 based on proposal received from AO. It was held that PCIT was using mind of AO to revise order which was not the scheme of section 263 of the Act. PCIT ought to apply his own mind to examine whether order passed by AO is erroneous and prejudicial to interest of revenue i.e. examine assessment records and assessment order made by AO to find out error. PCIT cannot take guidance from AO to revise the assessment order which is the revisional jurisdiction vested as per scheme of the Act. It was finally concluded by Tribunal that Revisional jurisdiction exercised by PCIT was not in accordance with law hence quashed order passed by PCIT allowing Assesses appeal. (AY. 2015-16)