#revisionary jurisdiction

A 2014 revision notice cancelling an earlier land-record order was set aside because the Karnataka Land Revenue Act imposes a strict three-year limit on exercising revisionary power, which cannot be extended by subsequent amendments or the Limitation Act. The ruling bars authorities from reviving old cases beyond that period, protecting owners of surveyed lands.

The ITAT Delhi holds that the two-year limitation under Section 263 begins from the date of the original assessment order, not the subsequent reassessment, when the revision challenges errors inherent in the initial assessment. This clarifies a critical procedural trap for tax authorities and protects assessees from delayed revisionary attacks on stale assessments, directly impacting how revenue departments strategize revisionary proceedings.

The ITAT Kolkata has ruled that invoking Section 263 to revise a previously scrutinized assessment is impermissible unless the revenue demonstrates actual prejudice, not just a technical error. This clarifies that scrutiny under Section 143(3) does not waive the twin-condition test, protecting taxpayers from arbitrary revisionary orders and reinforcing procedural fairness in income tax administration.

ITAT Bangalore ruled that a revisionary order under Section 263 of the Income Tax Act is invalid if the Principal Commissioner fails to verify the existence of an expenditure claim before setting aside an assessment. The tribunal emphasized that such orders violate principles of natural justice and cannot be sustained without establishing a nexus between the assessee and alleged payees. This ruling reinforces the need for thorough inquiry before invoking revisionary jurisdiction.

The Bombay High Court has ruled that the Commissioner of Income Tax cannot invoke Section 263 to revise an assessment order merely because he disagrees with the Assessing Officer's plausible interpretation of income utilization. The revisionary power is only valid if the original order suffers from a legal error, failure to inquire, or non-application of mind - not because the view was suboptimal or inconvenient to the revenue.

ITAT Delhi holds that Section 69C cannot be invoked under revision proceedings if AO disallows purchases as bogus under Section 37(1), clarifying statutory boundaries.