The phrase 'prejudicial to the interests of the revenue' is not confined to loss of tax.

Описание: Link of full case: https://drive.google.com/file/d/1um0c...

[2020] 420 ITR 216 (ALL)
IN THE ALLAHABAD HIGH COURT
M/S MEERUT ROLLER FLOUR MILLS PVT. LTD.
VERSUS
THE COMMISSIONER OF INCOME TAX AND ANOTHER
HF: ASSESSEE
SECTION 263
AUGUST 14, 2019

HELD THAT:- In the present case, the CIT himself while relying upon the reply submitted by the assessee had partially accepted the claim as far as investment in share capital was concerned but it did not accept the documentary evidence and reply submitted by the assessee before the AO as far as unsecured loans and creditors are concerned.
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.
The phrase 'prejudicial to the interests of the revenue' is not an expression of art and is not defined in the Act. Understood in its ordinary meaning, it is of wide import and is not confined to loss of tax.
The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer.
"…...if a query is raised during assessment proceedings and responded to by the assessee, the mere fact that it is not dealt with in the Assessment Order would not lead to a conclusion that no mind had been applied to it."
It is clear that after the notice was issued by the Assessing Officer raising 28 queries from the assessee, which was also replied by him along with the documentary evidence in regard to each of the query, thus the assessment order passed under Section 143(3) of the Act would not render the same as erroneous and prejudicial to the interest of Revenue, unless the Commissioner exercising power under Section 263 brings on record to show that the order of the Assessing Officer is erroneous, as the same was passed without application of mind or the Assessing Officer had made an incorrect assessment of fact or incorrect application of law

The phrase 'prejudicial to the interests of the revenue' is not confined to loss of tax.

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