PANKAJ GOYAL Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) WHAT is under challenge in these petitions filed under Articles 226 and 227 of the Constitution of India are show cause notices issued by respondent No. 1 in terms of Section 263 of the Income tax Act, 1961. Mr. P.C. Jain, learned counsel appearing for the petitioners, has assailed the impugned show cause notices on the ground of these being without jurisdiction whereas Mr. Kuthiala, learned counsel appearing for the respondents, has submitted that respondent No. 1 has issued these show cause notices as a prelude to his exercising revisional jurisdiction in terms of Section 263 and that the impugned show cause notices do not suffer from any error of jurisdiction.

(2.) THE pre requisite for the exercise of jurisdiction by the Commissioner of Income tax suo motu in terms of Section 263 is that the order of the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner of Income tax has to be satisfied about the aforesaid based on two conditions and these two conditions are, firstly that the order of the Assessing Officer sought to be revised under Section 263 is erroneous, and secondly that it is prejudicial to the interests of the Revenue. If any one of the aforesaid two conditions is absent, either the order is erroneous, but it is not prejudicial to the interests of the Revenue, or the order is not erroneous but it is prejudicial to the interests of the Revenue, recourse to Section 263 cannot be had by the Commissioner of Income tax.

(3.) ON the basis of the aforesaid observations, therefore, we feel totally disinclined to interfere in the proceedings at this stage, particularly when we know that if at all, on the merits of the cases respondent No. 1 ultimately passes adverse orders against the petitioners, the petitioners have the remedy of filing statutory appeals against the same before the appellate forum.