Section 23 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 23 gives a senior officer a power to revise an order of a subordinate tax authority when the order is erroneous and prejudicial to the interests of the revenue. It sets a hearing, limits what the revision can do, fixes a two-year period and lists three situations in which an order is deemed erroneous. The text below is read from the Act as enacted and published in the Gazette of India on 27 May 2015.
The Principal Commissioner or the Commissioner may call for and examine records and, after giving the assessee an opportunity of being heard, pass a revision order if the order is erroneous in so far as it is prejudicial to the interests of the revenue. The revision order may enhance or modify the assessment but cannot cancel it and direct a fresh one. It cannot be made after two years from the end of the financial year in which the order was passed, as enacted, with a few exceptions.
Sub-section (1) to (3): the power, the test and the hearing
Section 23(1) says the Principal Commissioner or the Commissioner may, for the purposes of revising any order passed in any proceeding under the Act before any tax authority subordinate to him, call for and examine all available records relating to it.
Section 23(2) says that he may, after giving the assessee an opportunity of being heard, pass an order (called the revision order) as the circumstances of the case justify, "if he is satisfied that the order sought to be revised is erroneous in so far as it is prejudicial to the interests of the revenue".
| Element | What the Act requires |
|---|---|
| Who | The Principal Commissioner or the Commissioner |
| Over what | An order passed in any proceeding under the Act before a tax authority subordinate to him |
| Test | The order is erroneous in so far as it is prejudicial to the interests of the revenue |
| Procedure | Call for and examine records; give the assessee an opportunity of being heard |
| Result | A revision order "as the circumstances of the case justify" |
Section 23(3) adds that he may make, or cause to be made, such inquiry as he considers necessary for passing the order under sub-section (2).
Both parts of the test must be present: the order must be erroneous, and the error must be prejudicial to the interests of the revenue. The section works against the assessee, and that is why the hearing in sub-section (2) matters. If you have been called to such a hearing, the papers and the reasons for the order under review are what you will need. A legal dispute resolution adviser can help you prepare.
Sub-section (4) and (5): what the revision can do
Section 23(4) says the revision order may have the effect of enhancing or modifying the assessment but shall not be an order cancelling the assessment and directing a fresh assessment. The bar on directing a fresh assessment is a real limit: a revision under this section cannot send the matter back for starting again.
Section 23(5) says the power under sub-section (2) shall extend to such matters as have not been considered and decided in any appeal. So matters already decided in an appeal are outside it, and matters not considered in the appeal are within it.
Sub-section (6) to (8): time limit
Section 23(6) says no order under sub-section (2) shall be made after the expiry of a period of two years from the end of the financial year in which the order sought to be revised was passed, as enacted.
Section 23(7) says, "notwithstanding anything in sub-section (6)", an order in revision may be passed at any time in respect of an order passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, the High Court or the Supreme Court.
Section 23(8) says that in computing the period in sub-section (6), the following shall not be included:
- (a) the time taken in giving an opportunity to the assessee to be reheard under section 7; or
- (b) any period during which any proceeding under this section is stayed by an order or injunction of any court.
The reference to the rehearing under section 7 links to our article on sections 6 and 7. For time limits on assessment itself, see section 11.
Sub-section (9): when an order is deemed erroneous
"Without prejudice to the generality of the foregoing provisions", an order passed by a tax authority shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if in the opinion of the Principal Commissioner or the Commissioner:
- (a) the order is passed without making inquiries or verification which should have been made; or
- (b) the order has not been made in accordance with any order, direction or instruction issued by the Board; or
- (c) the order has not been passed in accordance with any decision, prejudicial to the assessee, rendered by the jurisdictional High Court or the Supreme Court in the case of the assessee or any other person under this Act or the Income-tax Act.
Each of the three turns on the opinion of the Principal Commissioner or the Commissioner. The Board here is the Central Board of Direct Taxes defined in section 2(5). The sub-section does not name any specific order or instruction, and this article names none. The words "without prejudice to the generality" show that the list is not exhaustive.
Sub-section (10): what "record" means
In the section, "record" shall include all records relating to any proceeding under the Act available at the time of examination by the Principal Commissioner or the Commissioner. So the review is made on the file as it stands when he examines it.
Revision at the assessee's instance
Section 23 is the department's side of revision. The revision of other orders, including on the assessee's application, is in section 24. For the parallel assessee-side revision under income-tax law, see our guide on revision on application by the assessee.
An example
An Assessing Officer passes an order accepting Rahul Jain's explanation of the source of a foreign deposit without asking for any bank statements. Within two years from the end of that financial year, the Commissioner calls for the records and forms the opinion that the order was passed without inquiries or verification which should have been made. Under section 23(9)(a), the order is deemed erroneous in so far as it is prejudicial to the interests of the revenue. After giving Rahul an opportunity of being heard, he passes a revision order enhancing the assessment. He cannot, under section 23(4), cancel the assessment and direct a fresh assessment.
Need help with a revision notice?
If you have received a notice that a senior officer proposes to revise an order in your favour, how you respond at the hearing matters. Our legal dispute resolution team can help you read the order under review, collect the records and prepare your submissions.
Key takeaways
- The Principal Commissioner or the Commissioner may revise an order of a subordinate authority that is erroneous in so far as it is prejudicial to the interests of the revenue.
- The assessee must be given an opportunity of being heard before the revision order.
- The revision order may enhance or modify the assessment but cannot cancel it and direct a fresh assessment.
- The time limit is two years from the end of the financial year in which the order was passed, as enacted, with exceptions for orders giving effect to Tribunal or court directions and for excluded periods.
- Section 23(9) deems an order erroneous in three situations, each depending on the opinion of the revising officer.
- Later Finance Act amendments to section 23 must be checked before acting. The reference to the Income-tax Act, 1961 is as printed in 2015; check the corresponding provision of the current income-tax law.
Read next
- Section 24: revision of other orders on application
- Section 11: time limit for assessment and reassessment
- Sections 19-22: appeals to the High Court and the Supreme Court
- Revision on the assessee's application: the parallel income-tax procedure
Disclaimer: Based on the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as enacted and published in the Gazette of India on 27 May 2015, and on the Rules of 2015 as notified on 2 July 2015, as consulted on 2 October 2026. Later Finance Act amendments, amendment rules and the current income-tax law should be checked. This article is general information, not legal advice; check the official text before acting.