The Supreme Court (SC) overruled an order passed by the Bombay High Court, which set aside a direction passed by the Commissioner of Income Tax (CIT) exercising his powers of revision under Section 263 of the Income Tax Act, 1961 (IT Act). SC observed that the scheme of IT Act is to levy and collect tax, and this task is entrusted to the Revenue. If due to an erroneous order of the Assessing officer the revenue is losing tax, lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. Therefore, the CIT can exercise his power of revision, under Section 263, to rectify the same.
