Assessment not Prejudicial to Revenue if AO Follows Jurisdictional HC’s Ruling: ITAT

The Income Tax Appellate Tribunal (ITAT) ruled that an assessment cannot be considered prejudicial to revenue if the Assessing Officer (AO) follows the jurisdictional High Court’s ruling in making the assessment. The case concerned whether an assessment that followed a High Court ruling could be challenged on the grounds of being prejudicial to the revenue. ITAT clarified that when the AO adheres to binding judicial precedents from jurisdictional High Courts, the assessment is deemed to be in compliance with the law. Therefore, any challenge based on such precedents cannot be maintained, as the AO's actions are considered lawful and not detrimental to the revenue. This ruling strengthens the importance of judicial consistency and the adherence to higher court judgments in tax assessments.