COMMISS"IONER OF INCOME TAX. MUMBAI versus AMITABH BACHCHAN

Citation: [2016] 3 S.C.R. 516 · Decided: 11-05-2016 · Supreme Court of India · Bench: RANJAN GOGOI · Disposal: Disposed off

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Judgment (excerpt)

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[2016) 3 S.C.R. 516 
COMMISS"IONER OF INCOME TAX. MUMBAI 
v. 
AMITABH BACHCHAN 
(Civil Appeal No. 5009 of2016) 
MAYll,2016 
[RANJAN GOGOi AND PRAFULLA C. PANT, JJ.] 
Income Tax Act, 1961 - s. 263 - Revision C!f" order prejudicial 
to Revenue - Suo motu revisional powers of Commissioner of Income 
Tax uls. 263 - Exercise of - Held: For exeri.:ise a/jurisdiction u/s. 
263, order passed by the Authority should be erroneous and 
prejudicial to the interest of the Revenue - Thereafter, the said power 
is available su~ject to observance of the principles of natural justice 
- Power of revision u/s. 263 is not co11tinge11t 011 the gh>ing of a 
notice to show cause - Requirement u/s.263 is an opportunity of 
hearing to the assessee and failure of the same renders the revisional 
order legally ji-agile - Full opportunity to controvert the same and 
to explain the circumstances surrounding such facts, must be 
afforded to assessee by C.I. T. prior to the finalization of the decision 
- On facts, C.I. Ton scrutinizing the record, noted that the assessee 
did not produce the books of account and other relevant documents 
despite various opportunities - Authorized representative of the 
assessee appeared during the revisional proceeding and had full 
opportunity to contest - It was revealed that the original assessment 
order on several heads was erroneous and had the potential of 
causing loss of revenue to the State - Requirement of giving 
reasonable opportunity of being heard was not breached - Order 
of the tribunal as regards the revisional order going beyond the 
show cause notice, cannot be accepted - Orders passed by the High 
Court not tenable - As regards the claim of additional expenses of 
30% of the gross professional receipts by assessee in its re-revised 
return, and the same was withdrmi'/1, making a claim which would 
prima facie disclose that the expenses in re~pect of which deduction 
has been claimed, were incurred and thereafter abandoning! 
withdrawing the same gives rise to the 11ecessity of further enquiry 
in the interest of the Revenue - Notice issued could not have been 
simply dropped 011 the ground that the claim has been withdrawn -
Thus, C.I. T. was justified in coming to his conclusions - Instant 
516 
COMMISSIONER OF INCOME TAX, MUMBAI v. AMITABH 
BACHCHAN 
case is a fit case for exercise of the suo motu revisional powers of 
the C. I. T. uls. 263 - Suo motu revisional order of C.I. T. is restored 
and those of the tribunal and the High Court is set aside. 
· 
Disposing of the appeals, the Court 
HELD: 1.1 The basic pre-condition for exercise of 
jurisdiction under Section 263 of the Income Tax Act is a 
satisfaction that an order passed by the Authority under the Act 
is erroneous and prejudicial to the interest of the Revenue. Both 
are twin conditions thathave to be conjointly present. Once such 
satisfaction is reached, jurisdiction to exercise the power woµld 
be available subject to observance of the principles of natural 
justice which is implicit in the requirement cast by the Section to 
give the assessee an opportunity of being heard. The power of 
revision under Section 263 is not contingent on the giving of a 
notice to show cause to the assessee. Rather, what is required 
under the said provision is an opportunity of hearing to the 
assessee. The two requirements are different; the first would 
comprehend a prior notice detailing the specific grounds on which 
revision of the assessment order is tentatively being proposed. 
Such a notice is not required. What is contemplated by Section 
263, is an opportunity of hearing to be afforded to the assessee. 
Failure to give such an opportunity would render the revisional 
order legally fragile not on the ground of lack of jurisdiction but 
on the ground of violation of principles of natural justice. [Para 
10] [524-D-G) 
1.2 It may be that in a given case/cases it is so done a notice 
proposing the revisional exercise is given to the assessee 
indicating therein broadly or even specifically the grounds on 
which the exercise is felt necessary. But there is nothing in Section 
263 to raise the said notice to the status of a mandatory show 
cause notice affecting the initiation of the exercise in the absence 
thereof or to require the C.I.T. to confine himself to the terms of 
the notice and foreclosing consideration of any other issue or 
question of fact. This is not the purport of Section 263. While the 
C.I.T. is 

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