Setback for South Indian Bank: ITAT Rules AO Cannot Exceed Scope of S.263 Revision While Passing Consequential Assessment Order

The ITAT handed a setback to the revenue in a South Indian Bank case, clarifying that an assessing officer (AO), while exercising powers under Section 263, cannot exceed the specific scope of revision while issuing a consequential assessment order. The Tribunal emphasized that AO’s power is limited to revising the earlier erroneous order and cannot expand beyond the stated reasons. This ensures protection against open-ended reopenings and preserves the integrity of revision proceedings. The ruling maintains procedural limits and prevents misuse of Section 263. (Article summary)