Answer

1. F

   Facts

   A senior officer, the Principal Commissioner or Commissioner, thinks your completed assessment order was wrong and caused loss to revenue. The notice asks why the order should not be revised. It is not a new assessment yet.

2. P

   Provisions and law

   • Sec 263, Income-tax Act 1961 (now Sec 377, Income-tax Act 2025)The Principal Commissioner or Commissioner can revise an assessment order that is erroneous and prejudicial to revenue, after giving a hearing, within 2 years from the end of the financial year of the order.
3. A

   Analysis

   Old Sec 263 of the 1961 Act is now Sec 377 of the 2025 Act; do not confuse it with Sec 263 of the 2025 Act, which deals with filing returns. The revising authority must show the order was both erroneous and prejudicial to revenue. If it does, it can enhance the assessment, modify it or set it aside for a fresh one. Your reply should show the officer had examined the issue properly.

4. C

   Conclusion

   1. 1Read the show cause and note the issues and reply date.
   2. 2Collect the assessment order and all notices and replies from that assessment.
   3. 3Prepare a point-wise reply showing the issue was examined.
   4. 4Submit through e-Proceedings and save the acknowledgement.

Old Sec 263 (revision) is not the same as Sec 263 of the 2025 Act (return of income); always attach the Act name.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.