IMPORTANT POINT
The main legal point established in the judgment is that the revisional jurisdiction under Section 263 of the Income Tax Act can only be invoked when the order is both erroneous and prejudicial to the revenue, and the initiation of revisional proceedings must be based on independent application of mind by the Principal Commissioner of Income Tax.

ORDER :

1. Heard Dr. A. Saraf, learned Senior Counsel assisted by Mr. N.N. Dutta, learned counsel for the petitioner. Also heard Mr. S. Chetia, learned Standing counsel, Income Tax Department representing respondent Nos. 2 & 3.

2. The challenge made in this writ petition is the Show Cause Notice No. ITBA/REV/F/REV1/2020-2021/1031736689(1) dated 24.03.2021 issued by respondent No. 2 initiating proceedings under Section 263 of the Income Tax Act, 1961 (herein after referred as ‘the Act’) for the assessment year 2017-18, and subsequent ex-parte Order No. ITBA/REV/F/REV5/2020-21/1031849150(1) dated 28.03.2021 passed by the respondent No. 2 under Section 263 of the Act for the assessment year 2017-2018.

3. The brief facts of the case is that the petitioner has filed its original return under Section 139(1) of the Act for the assessment year 2017-18 on 01.08.2017 declaring a total income of Rs. 43,95,310/- (Rupees Forty-three lakh ninety-five thousand three hundred ten) only. Later, vide Notice No. ITBA/AST/S/143(2)/2018-19/1010911976(1) dated 09.08.2018 under Section 143(2) of the Act, the case of the petitioner was selected for “limited scrutiny” under Computer Assisted Scrutiny Selection (“CASS”). During the course of assessment proceedings, Show Cause Notice dated 29.09.2018 was issued by the then Assessing Officer (i.e. predecessor of respondent No. 4) and the same was duly replied to vide letter dated 19.12.2018 by the petitioner. Thereafter, the then Assessing Officer (i.e. predecessor of respondent No. 4) passed the final assessment under Section 153D/143(3) of the Act vide Assessment Order dated 28.12.2018, accepting the returned income of Rs. 43,95,310/- (Rupees Forty-three ninety-five thousand three hundred ten) only.

4. However, later, after completion of Assessment, vide Show Cause Notice No. ITBA/REV/F/REV1/2020-21/1031736689(1) dated 24.03.2021 (received by the petitioner through Email at 20:14 PM) the respondent No. 2 directed the petitioner to show cause as to why order should not be passed under Section 263 of the Act for revision of the Assessment Order dated 28.12.2018 passed by then Assessing Officer (i.e. predecessor of respondent No. 4) for the assessment year 2017-18. The only allegation made in the Show Cause Notice dated 24.03.2021 was that an amount of Rs. 5,30,257/- (Rupees Five lakh thirty thousand two hundred fifty-seven) only being the difference between long-term capital gains from sale of shares credit at Rs. 36,89,039/- (Rupees Thirty-six lakh eighty-nine thousand thirty-nine) only shown in the computation of income at Rs. 31,58,782/- (Rupees Thirty-one lakh fifty-eight thousand seven hundred eighty-two) only had not been brought to tax in the original assessment proceedings under Section 143(3) of the Act. Thereafter, by Show Cause Notice dated 24.03.2021 the petitioner was directed to furnish reply thereto and appear for hearing on 26.03.2021 at 12 pm, thereby, giving only one day to the petitioner to respond to the said notice. Due to such short span of time, the petitioner could not attend the Show-Cause Notice dated 24.03.2021. The respondent No. 2 thereafter vide his ex-parte Order No. ITBA/REV/F/REV5/2020-21/1031849150(1) dated 28.03.2021, held the Assessment Order dated 28.12.2018 passed by the respondent No. 4 as erroneous and prejudicial to the interests of the revenue.

5. The aforesaid Assessment Order dated 28.12.2018 is challenged before this Court.

6. Dr. A. Saraf, learned Senior Counsel submits that the present writ petition is filed challenging inter-alia, Ex-Parte Order dated 28.03.2021 passed by Principal Commissioner of Income Tax, Guwahati-1 under Section 263 of the Income Tax Act, 1961 for the assessment year 2017-2018 alongwith the Show Cause Notice dated 24.03.2021.

7. He further submits that the power of suo moto revision under Section 263 of the Act is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exists. Two cir