Per Joginder Pall, Accountant Member: This appeal of assessee has been filed against order of Commissioner of Income-tax, Jammu (in short, 'CIT') passed under section 263 of Income-tax Act, 1961 (in short, 'the Act') for assessment year 2002-03. 2. only effective ground raised in appeal is as under: '1. Commissioner of Income-tax is unjustified in cancelling orders t o extent of issue of disallowance to be made under section 14A of Income-tax, Act, 1961 and also on issue of non-availability of exemption under section 10(23G) of Income-tax Act, 1961 earlier allowed by Assessing Officer rightly and correctly under section 143(3) read with order under section 154 of Income-tax Act, 1961. CIT is not correct to state with order under section 154 of Income-tax Act, 1961. CIT is not correct to state that order passed by Assessing Officer is erroneous and prejudicial to interest of revenue to extent of above. directions given by CIT to Assessing Officer to frame assessment afresh on these issues is unjustified, bad in law and against facts of case. It is prayed that order of CIT passed under sec. 263 of Income-tax Act, 1961 may please be cancelled.' 3. facts of case are that assessee is Bank. In return of income filed, assessee had claimed exemption in respect of its income of Rs. 6,86,45,804 under section 10(15), Rs. 20,57,03,438 under section 10(23G) and Rs. 8,66,70,665 under section 10(33) of Act. total income in respect of which exemption was claimed aggregated to Rs. 36,10,19,907. assessment was completed by Assessing Officer under section 143(3) of Act on 30-3- 2 0 0 5 , wherein Assessing Officer disallowed exemption of income aggregating to Rs. 36.10 crores on ground that assessee was asked to furnish details with photocopies and documentary evidence, which had not been furnished. Assessing Officer observed that in absence of proper evidence, claim could not be verified. Subsequently, however, assessee moved application under section 154 requesting Assessing Officer to rectify assessment order for reason that it had furnished all relevant details during course of assessment proceedings for earlier assessment years 2000-01 and 2001-02. It was also stated that interest income amounting to Rs. 6,46,04,130 earned on advances given by assessee to three infrastructure enterprises was claimed exempt under section 10(23G) as per revised return. It was also stated that copies of Notifications were enclosed with revised return of income. Thus, it was submitted that since mistake was apparent from record, same may be rectified under section 154 of Act. Accepting contentions of assessee, Assessing Officer allowed exemption of income aggregating to Rs. 36.10 crores under section 10(15), 10(23G) and 10(33) of Act by observing as under: 'Exempted Income under section 10(15), 10(23G) and 10(33) amounting to Rs. 36,10,19,907. This income is income which have been earned by bank but exempt under section 10 detailed as under. 10(15): Rs. 6,86,45,804 10(23G): Rs. 20,57,03,438 10(33): Rs. 8,66,70,665 ld. counsel of assessee have shown necessary evidences from records and it is found that this income has wrongly been added to income of bank and same is reduced from income already assessed under section 143(3). (-361019907)' 3.1 Subsequently, Additional Income-tax Commissioner, Range-1, Jammu, submitted proposal under section 263 of Act vide his letter dated 24-11-2006 stating therein that order under section 143(3) dated 30-3-2005 read with order under section 154 dated 18-5-2005 passed by Assessing Officer was erroneous and prejudicial to interest of revenue. reason given for such proposal was that Assessing Officer failed to examine allow ability of exemption claimed by assessee in respect of its income aggregating to Rs. 36,10,19,907 under section 10(15), 10(23G) and 10(33) of Act, in light of section 14A of Act, which has been brought to statute by Finance Act, 2001 with effect from 1-4-1962 and was applicable to assessment year under reference. Thus, it was mentioned that Assessing Officer failed to examine disallowance of proportionate interest and management expenses against income claimed as exempt within meaning of section 14A of Act. Thus, it was submitted that order passed by Assessing Officer was erroneous and prejudicial to interests of revenue. ld. CIT examined proposal along with case records sent by Addl. Commissioner of Income-tax and observed that in addition to non- consideration of provisions of section 14A, Assessing Officer had also allowed exemption in respect of income of Rs. 6,46,04,130 under section 10(23G) as per order under section 154 without examining its allow ability or otherwise. He observed that exemption under section 10(23G) was available only to 'Infrastructure Capital Fund' or 'Infrastructure Capital Company' or 'Co- operative Bank'. Since assessee was neither 'Infrastructure Capital Fund' or 'Infrastructure Capital Company' nor 'Cooperative Bank', assessee was not entitled to exemption of its income under section 10(23G) of Act. Thus, ld. CIT issued notice under section 263 of Act to assessee to show cause why action under section 263 should not be taken on these points. 3.2 In reply to show-cause notice, assessee filed written submissions objecting to proposed action of CIT wherein it was stated that there was no dispute about applicability of section 14A of Act to assessment year under consideration. However, as per provisions of section 14A of Act, only those expenses, which were incurred in relation to earning income of Rs. 36.10 crores were to be considered for disallowance under section 14A of Act. It was submitted that assessee had sufficient amount of surplus funds for making investment in bonds and shares in respect of which income was claimed exempt under section 10(23G). Reliance was also placed on decision of ITAT, Amritsar Bench, in assessee's own case for assessment year 1992-93 in ITA No. 68 (Asr.)/1997, where deduction under section 80M was claimed and Tribunal upheld order of CIT(A) to extent that only expenses of Rs. 25,000 were to be considered against dividend income. Reliance was also placed on two judgments of Hon'ble Bombay High Court in cases of CIT v. General Insurance Corporation of India (No. 1) [2002] 254 ITR 203 and CIT v. Central Bank of India [2003] 264 ITR 522, where it was held that expenses incurred on account of salary paid to staff, stamp duty, transfer fees and safe custody charges disallowed by Assessing Of-ficer but allowed by Hon'ble High Court on ground that these were not directly relatable to earning of dividend income. Three judgments of Hon'ble Calcutta High Court in cases of CIT v. National and Grindlays Bank Ltd. [1993] 202 ITR 559, CIT v. United Collieries Ltd. [1993] 203 ITR 857 and CIT v. Enemour Investments Ltd. [1994] 72 TAXMAN 370 were also pressed into service. Reliance was also placed on two decisions of ITAT, Delhi Benches on issue of section 14A of Act in Maruti Udyog Ltd. v. Dy. CIT [2005] 92 ITD 119 and Asstt. CIT v. Eicher Ltd. [2006] 101 TTJ (Delhi) 369. Some other decisions of ITAT, Bombay Bench, were also relied upon in support of contentions that expenses could not be disallowed on proportionate basis. These have been referred to on pages 3 and 4 of impugned order. It was also contended that proposal to disallow proportionate interest and management expenses amounts to change of opinion. 3.3 As regards exemption claimed under section 10(23G) and allowed by Assessing Officer, assessee submitted that provisions of this section were inserted by Finance (No. 2) Act, 1996 with effect from 1-4-1997 and ever since assessee had been claiming and is being allowed exemption under section 10(23G). Reliance was also placed on Circular No. 762, dated 18- 2-1998, which contains Explanatory notes for insertion of this section in Act. Para 17.4 of Explanatory Notes explained meaning of 'Infrastructure Capital Company' as to mean company which has made investment by way of acquiring shares or providing long-term finance to enterprise engaged in business of providing infrastructure facility i.e., road, highway, bridge, airport, port, rail system, or any other public facility of similar nature. It was submitted that since assessee was 'Infrastructure Capital Company' and amounts were invested in shares or providing long-term finance to enterprises carrying on infrastructure facility, assessee had rightly claimed and was allowed exemption under section 10(23G) of Act, right from date when this section was inserted in Act. assessee also referred to Circular No. 14, dated 22-11-2001 issued by CBDT whereby Co-operative Banks which were neither companies nor infrastructure capital funds were also made eligible to exemption of their income under section 10(23G) with effect from 1-4- 2002. Thus, it was contended that all those companies including banks which have made investment by way of acquiring shares or providing long-term finance to enterprises engaged in providing infrastructure facility are covered by definition of 'Infrastructure Capital Company'. It was contended that assessee had made investments by way of acquiring shares or providing long-term finance to enterprises engaged in providing infrastructure facility and, therefore, assessee was entitled to exemption under section 10(23G) of Act. Relying on judgment of Hon'ble Supreme Court in ease of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, it was contended that in order to assume jurisdiction under section 263 by CIT, two conditions must be satisfied simultaneously i.e., (i) order of Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to interests of revenue. It was submitted that CIT cannot assume jurisdiction under section 263 in cases where divergent views have been expressed by different High Courts and order passed by lower Authority is in accordance with view of jurisdictional Bench. Reliance was also placed on judgment of Hon'ble Supreme Court in case of CIT v. G.M. Mittal Stainless Steel (P.) Ltd. [2003] 263 ITR 255. 4. ld. CIT considered aforesaid submissions and observed that ld. counsel has agreed that section 14A of Act was applicable to this case. ld. CIT observed that admittedly at time of passing order under section 143(3), read with section 154, Assessing Officer did not consider provisions of section 14A before allowing exemption in respect of gross income of Rs. 36.10 crores. ld. CIT(A) did not find any merit in submissions of assessee that assessee was having interest free funds, which were invested in shares or for providing long-term finances to enterprises engaged in infrastructural facility. He observed that assessee was having both interest bearing as well as own funds in common pool and assessee has not been able to pin-point that funds utilised to earn exempt income were out of interest-free funds. He also referred to various judgments relied upon by ld. counsel and observed that most of those judgments related to computation of dividend income for purpose of claiming deduction under section 80M of Act. He observed that decision of ITAT, Amritsar Bench, for assessment year 1992-93 (supra) was also with reference to deduction under section 80M where Tribunal, held that apportionment of 10 per cent of dividend income earned by assessee was not done on reasonable basis. He also observed that two judgments of Hon'ble Bombay High Court in cases of General Insurance Corporation of India (No. 1) (supra) and Central Bank of India (supra) also related to section 80M. decision of ITAT, Indore Bench in case of State Bank of Indore v. CIT in [MA No. 1775 of 2004] related to section 80M and not to provisions of section 14A of Act. Therefore, those were distinguishable. He also referred to decision of ITAT, Delhi Bench in case of Maruti Udyog Ltd. (supra), where it was held that any expenditure which is proved to have nexus directly or indirectly with utilisation of funds for earning tax-free income has to be disallowed while computing income qualifying for exemption. He observed that order of Assessing Officer was erroneous insofar as it was prejudicial to interest of revenue because Assessing Officer did not make any enquiry in light of provisions of section 14A of Act for purpose of considering disallowance of expenditure incurred in relation to income claimed exempt. He also rejected submission of assessee that action under section 263 was being taken on basis of mere change of opinion. He relied on judgment of Hon'ble Supreme Court in case of CIT v. United General Trust Ltd. [1993] 200 ITR 488, where it was held that while computing deduction under section 80M, proportional management expenses are required to be deducted from dividend receipts. Thus, ld. CIT(A) held that action of Assessing Officer not to consider disallowance of expenditure incurred in relation to income claimed exempt and not forming part of total income was erroneous and prejudicial to interest of revenue. 4.1 As regards second point on which ld. CIT had proposed action under section 263 that assessee was not entitled to exemption of its income under section 10(23G) of Act, ld. CIT referred to memorandum explaining provisions of Finance (No. 2) Bill, 1996, vide which said provision was brought to statute and observed that tax exemption was available only to such 'Infrastructure Capital Fund' or 'Infrastructure Capital Company', which are established for purpose of mobilising resources for financing infrastructure facilities. He observed that since assessee was not established for purposes of mobilising resources for financing infrastructure facilities, it cannot be termed as 'Infrastructure Capital Company'. Therefore, assessee was not entitled to exemption claimed under section 10(23G) of Act. He also observed that wording of section 10(23G) was clear and unambiguous and, therefore, literal rule of interpretation should be applied. He also observed that submissions of ld. counsel that benefit under section 10(23G) was subsequently extended to income of Co-operative Banks would not mean that all banks were entitled to claim benefit under section 10(23G). He also referred to judgment of Hon'ble Supreme Court in case of Malabar Industrial Co. Ltd. (supra) and observed that in this case twin conditions stipulated under section 263 were duly met. He also found that judgment of Hon'ble Supreme Court in case of G.M. Mittal Stainless Steel (P.) Ltd. (supra) was not applicable to facts of present case because proposed action under section 263 was not based on divergent views expressed by different High Courts. Thus, ld. CIT(A) held that order under section 143(3) read with section 154 of Act was erroneous and prejudicial to interests of revenue and accordingly cancelled same to extent mentioned above with direction that Assessing Officer should frame assessment afresh on above issue as per law after giving assessee adequate opportunity of being heard. assessee is aggrieved with order of CIT. Hence, this appeal before this Bench. 5. ld. counsel for assessee, Sh. R.K. Gupta, reiterated submissions made before authorities below. He referred to assessment order dated 30-3-2005, where Assessing Officer had not allowed exemption i n respect of income aggregating to Rs. 36,10,19,907 claimed under section 10(15), 10(23G) and 10(33) of Act, for reason that requisite details and documentary evidence were not furnished. Thereafter, assessee moved n application under section 154 where it was stated that all requisite informations along with documentary evidence were furnished during course o f completion of assessment for assessment years 2000-01 and 2001-02 and, therefore, assessee had rightly claimed exemption in respect of income of aforesaid amount. He submitted that Assessing Officer accepted such claims under section 154 and allowed exemption of its income aggregating to Rs. 36.10 crores. He drew our attention to copy of order passed under section 154 of Act. He submitted that thereafter assessee received show- cause notice from CIT proposing action under section 263 on two grounds that while allowing exemption i.e., (i) Assessing Officer neither considered provisions of section 14A nor made any enquiry for purpose of computing disallowance of expenses in respect of income claimed exempt, and (ii) assessee was not entitled to exemption of its income under section 10(23G). ld. counsel submitted that detailed reply to show-cause notice issued b y CIT was submitted vide letter dated 19-3-2007 and same has been reproduced by CIT at pages 3 to 13 of impugned order. Relying on judgment of Hon'ble Supreme Court in case of Malabar Industrial Co. Ltd. (supra), ld. AR submitted that jurisdiction of CIT to revise order passed by Assessing Officer can be assumed only if twin conditions i.e., (i) order sought to be revised must be erroneous and (ii) it must be prejudicial to interests of revenue. He submitted that in regard to allegation that while allowing exemption of income claimed by assessee, Assessing Officer had neither made enquiry nor referred to provisions of section 14A was factually correct. Assessing Officer had over-looked provisions of section 14A while allowing exemption of income. Therefore, this was error on part of Assessing Officer. However, second condition that order must be prejudicial to interests of revenue has not been satisfied. He submitted that during course of revision proceedings under section 263, it was pointed out to CIT that assessee had sufficient interest-free funds, which were invested in making investments in shares and providing long-term finances to enterprises engaged in providing infrastructural facility. Therefore, no disallowance of interest was called for. Reliance was placed on decision of ITAT, Amritsar Bench in case of assessee in ITA No. 68 (Asr.)/1997 for assessment year 1992-93 (a copy of order placed at pages 13 to 15 of paper book), where Assessing Officer had disallowed 10 per cent of expenses against dividend income for claiming deduction under section 80M. However, ld. CIT(A) had considered disallowance of Rs. 25,000 as fair and reasonable. On appeal, Tribunal upheld order of CIT(A). He further submitted that CIT is not correct in holding that proportional administrative expenses have to be disallowed for computing income claimed exempt under aforesaid sections of Act. He submitted that judgment of Hon'ble Supreme Court in case of United General Trust Ltd. (supra) relied upon by ld. CIT is with reference to deduction in respect of dividend income under section 80M and not with reference to exemption of income claimed by assessee, where provisions of section 14A have to be considered. He referred to decision of ITAT, Delhi Benches in case of Eicher Ltd. (supra) (a copy of order placed at pages 106 to 120 of paper book), where it has been held that expenses to be disallowed under section 14A in respect of income claimed exempt are those which have been actually incurred with view to earning non-taxable income. He submitted that no disallowance can be made on notional basis. It is duty of Assessing Officer to pin point such expenditure on bass of material on record. He submitted that while taking such view, Tribunal has distinguished judgment of Hon'ble Supreme Court in case of United General Trust Ltd. (supra), which was with reference to allowing deduction under section 80M of Act. He further relied on decision of ITAT, Delhi Bench in case of Maruti Udyog Ltd. (supra) which was referred to by Tribunal in case of Eicher Ltd. (supra). He further referred to judgment of Hon'ble Madhya Pradesh High Court in case of State Bank of Indore v. CIT [2005] 275 ITR 23 (a copy of order placed at pages 90 to 94 of paper book), where Hon'ble High Court has held that expenditure to be considered against dividend income for purpose of allowing deduction under section 80M is actual expenditure and not notional expenditure. He also relied on two decisions of Hon'ble Bombay High Court in cases of General Insurance Corporation of India (No. 1) (supra) (a copy of order placed at pages 85-86 of paper book) and Central Bank of India (supra) (a copy of order placed at pages 87 to 89 of paper book), where it has been held that deduction under section 80M has to be allowed in respect of net income computed as per provisions of Act and rule of proportionate expenditure and interest contemplated by section 20, as i t then stood, could not be imported into section 80M. He submitted that establishment expenses are common and these were not incurred exclusively for purpose of earning income claimed exempt by assessee. Therefore, no expenses on that account could be allocated for disallowance on proportionate basis. He further submitted that for purpose of assuming jurisdiction under section 263, it is duty of CIT to call for and examine case records at his end. He referred to para 1 of impugned order, where CIT has merely relied on proposal dated 24-11-2006 submitted by Addl. CIT, Jammu under section 263 in respect of disallowance of expenses under section 14A. He submitted that CIT has not applied his independent mind and was merely guided by proposal submitted by Addl. CIT. He submitted that such action of CIT was bad in law. He relied on judgment of Hon'ble GauhatiHigh Court in case of B&A Plantation & Industries Ltd. v. CIT [2007] 290 ITR 395 (a copy of order placed at pages 153 to 169 of paper book), where order under section 263 was struck down because such action was taken merely on basis of objection raised by Internal Audit Party without independent application of mind. 5.1 As regards claim of assessee for exemption of its income under section 10(23G), ld. counsel submitted that assessee is covered by expression 'Infrastructure Capital Company'. He referred to CBDT's Circular No. 762, dated 18-2-1998 (a copy placed at pages 9 and 10 of paper book), whereby purpose of expanding scope of exemption under section 10(23G) was explained. It has been mentioned therein that purpose of expanding scope, exemption is to attract further investment in infrastructure facility by providing more tax incentive to investors. He referred to para 17.4 of said Circular which explains meaning of expression 'Infrastructure Capital Company' as to mean company which has made investment by way of acquiring shares or providing long-term finance to enterprises engaged in business of providing infrastructure facility. He submitted that case of assessee is squarely covered under such definition. He further referred to pages 11 and 12 of paper book, which is copy of CBDT's Circular No. 14, dated 22-11-2001, which explains purpose of amendments relating to Direct Taxes introduced by Finance Bill, 2001. He submitted that as per para 18.1 of said Circular, it was mentioned that Co- operative Banks being neither company nor fund operating under provisions of Registration Act were not covered by definitions of 'Infrastructure Capital Fund' or 'Infrastructure Capital Company'. Thus, clause (23G) of section 10 has been amended so as to provide that income of Co- operative Bank by way of interest, dividends (other than dividends referred to in section 115-O) and long-term capital gains from investments made by way of equity or long-term finance in approved enterprise will also be exempt from payment of income-tax. This means that all other banks which were companies are covered under definition of 'Infrastructure Capital Company' for purpose of exemption under section 10(23G). Thus, ld. counsel submitted that assessee has been allowed exemption under section 10(23G) right from assessment year 1999-2000 to 2004-05. He referred to copy of assessment order passed under section 143(3) for assessment year 2003- 04, (placed at pages 18 to 50 of paper book) and for assessment year 2004-05 (at pages 51 to 81 of paper book). He submitted that these assessments were completed under section 143(3). Therefore, principle of consistency is required to be followed in this case. For this proposition, he relied on following judgments: (i)The judgment of Hon'ble Delhi High Court in case of DIT (Exemption) v. Lovely Bal Shiksha Parishad [2004] 266 ITR 349. (ii)The judgment of Hon'ble Supreme Court in case of Radhasoami Satsang v. CIT [1992] 193 ITR 321. (iii)The judgment of Hon'ble Punjab and Haryana High Court in case of CIT v. Leader Valves Ltd. [2007] 295 ITR 273. (iv)The judgment of Hon'ble Supreme Court in case of Berger Paints India Ltd. v. CIT [2004] 266 ITR 99. He further submitted that claim of assessee for exemption under section 10(23G) has been accepted by Assessing Officer for both earlier years as well as subsequent years after examining relevant details and proper enquiry. Therefore, relying on judgment of Hon'ble Gujarat High Court in case of CIT v. Arvind Jewellers [2003] 259 ITR 502, ld. counsel submitted that order passed by CIT deserves to be set aside. 6. ld. DR, on other hand, heavily relied on order of CIT, Jammu and also filed written submissions. He drew our attention to memorandum explaining proposed amendment to Finance (No. 2) Bill, 1996 vide which provisions of section 10(23G) had been brought to statute. He submitted that 2nd para of said circular explains purpose of providing tax exemption to such infrastructure capital funds and Infrastructure capital companies, which are established for purposes of moblising resources for financing Enterprises engaged in providing infrastructure facilities. He submitted that in present case, assessee is not 'Infrastructure Capital Company' because it has not been established for purpose of mobilising resources for financing infrastructural facilities. Thus, he submitted that assessee was not entitled to exemption under section 10(23G) of Act. 6.1 As regards second issue, on which order under section 263 has been passed by CIT, ld. DR submitted that during course of proceedings under section 263, assessee had itself accepted that Assessing Officer had not considered provisions of section 14A of Act, which were applicable to present case. There is no material to show that assessee had interest-free funds, which alone were invested in earning income which was claimed exempt under section 10(15), 10(23G) and 10(33) of Act. H e also referred to Board's Circular No. 780, dated 4-10-1999, where it was clarified that exemption under section 10(23G) would be allowed in respect of net income after taking into account all expenses incurred to earn same. Thus, what would be exempt under clause (23G) of section 10 is income by way of dividend, interest or long-term capital gain and not gross receipts. He, therefore, argued that failure on part of assessee to consider expenses relating to income not forming part of total income and thereby allowing deduction of entire gross income was against provisions of Act, resulting in prejudice to revenue. Thus, he submitted that ld. CIT was justified in coming to conclusion that order of Assessing Officer was erroneous and prejudicial to interest of revenue. He also relied on following judgments: following judgments: (i) judgment of Hon'ble Supreme Court in case of United General T r u s t Ltd. (supra), where it was held that proportionate management expenses are to be considered against dividend income while computing deduction under section 80M. (ii)The judgment of Hon'ble Supreme Court in case of CIT v. Ralson Industries Ltd. [2007] 288 ITR 322 dated 4-1-2007, 2006-ITS-06, where it was held that order under section 263 cannot be held to be bad in law merely because order of rectification was passed [a copy placed at pages 23 to 26 of departmental paper book (in short, 'DPB')]. (iii) decision of ITAT, Delhi Bench in case of Tehri Steel Ltd. v. Asstt. CIT, in ITA No. 1249/Delhi/2006 for assessment year 2002-03, reported in 2007-TIOL-240-ITAT-DEL, where Tribunal has held that order is erroneous not only due to apparent error of law or reasoning but also where it accepts everything that is submitted by assessee without making valid enquiries which are called for on facts of case. (A copy placed at pages 27 to 31 of DPB). (iv)The decision of ITAT, Delhi Bench in case of Kotdwar Steel Ltd. v. Asstt. CIT, Cir-2, Dehradun, in ITA No. 1311/Delhi/2006 for assessment year 2002-03, reported in 2007-TIOL-95-ITAT-Del. (A copy placed at pages 32 to 35 of paper book). In this case, Tribunal upheld order passed under section 263 on ground that there were grey submissions made by assessee for which detailed enquiries were called for. Failure to do so made assessment order as erroneous and prejudicial to interest of revenue. (v) decision of ITAT, Chandigarh Bench in case of Ind Sphinx Precision Ltd. v. CIT [2007] 11 SOT 498 in ITA Nos. 549 and 550/Chandi/2004 f o r assessment years 2000-01 and 2001-02, reported in 2007-TIOL-247- ITAT-CHD (a copy placed at pages 36 to 49 of paper book). In this case, order passed under section 263 by CIT was upheld because assessment order was passed without giving any reasons for accepting contentions of assessee and that too against jurisdictional Tribunal. (vi)The decision of ITAT, Amritsar Bench, in case of Sexa Securities & Finance Co. Ltd. v. ITO, Ward 12(2), N. Delhi, in ITA No. 2308/Delhi/2004 for assessment year 1999-2000 reported in 2007-TIOL-43-ITAT-DEL (a copy placed at pages 52 to 60 of paper book). In this case, Assessing Officer allowed exemption of dividend income of Rs. 23,15,802 under section 10(23) without considering provisions of section 14A. Such order of assessment was held to be erroneous and bad in law. (vii)The decision of ITAT, Mumbai Bench in case of Mohanlal M. Shah v. Dy. CIT, CC.II, Mumbai, in ITA No. 3169/Mum./2004 for assessment year 1999-2000 reported in 2007-TIOL-249-ITAT-MUM. (a copy placed at pages 61 to 66 of paper book). In this case, it was held that interest paid on borrowed funds utilised for purpose of investment in shares is not to be allowed either as expenditure or as part of cost of acquisition of shares in view of provisions of section 14A of Act. 6.2 ld. DR also submitted that cases relied upon by ld. AR are not applicable to facts of present case because most of judgments/decisions of Tribunal were applicable to provisions of section 80M and not in respect of income claimed as exempt. He further relied on judgment of Hon'ble Supreme Court in case of Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323, where order for revision passed by CIT was upheld, even though it was claimed that some other person was liable to tax on income. 7. We have heard both parties and carefully considered rival submissions, examined facts, evidence and material placed on record. We have also gone through orders of authorities below, referred to relevant provisions of Act and pages of paper book to which our attention has been drawn. judgments relied upon by parties have also been referred to. From facts discussed above, it is obvious that at time of completing assessment for assessment year under consideration under section 143(3), Assessing Officer did not allow claim of exemption of its income made under section 10(15), 10(23G) and 10(33) on ground that assessee failed to furnish requisite documentary evidence and details for claiming exemption. However, Assessing Officer allowed such claim in order passed under section 154 of Act by accepting contentions of assessee that such evidence was placed on record during course of assessment proceedings for earlier assessment years 2000-01 and 2001-02. undisputed facts of case are that at time of completing assessments and even at time of passing order under section 154, Assessing Officer did not take into account provisions of section 14A of Act. Section 14A of Act provides that for purposes of computing total income under this Chapter, no deduction shall be allowed in respect of expenditure incurred by assessee in relation to income which does not form part of total income under this Act. CBDT has also clarified meaning of income used in clause (23G) of section 10 vide Circular No. 780, dated 4-10- 1999 where it was mentioned that it is net income after taking into account all expenses incurred to earn same that is exempt under section 10(23G) of Act. Board has also clarified that term 'Income' as used in said section refers to income as computed under provisions of Income-tax Act, 1961 and, therefore, it is not 'gross receipts' but 'Net income' of nature referred to in said clause. In any case, section 14A refers to expenditure incurred in relation to income which does not form part of total income under this Act. assessee had claimed exemption of its income aggregating to Rs. 36,10,19,907 which comprised of Rs. 6,86,45,804, Rs. 2,05,73,438 and Rs. 8,66,70,665 under section 10(15), 10(23G) and 10(33) respectively. While claiming such exemption, assessee had taken only gross receipts and expenditure incurred relating to such income was not disallowed as per provisions of section 14A of Act. Thus, assessee had claimed exemption in respect of gross receipts and not in respect of net income. It is admitted by ld. counsel during proceedings before CIT(A) as well as before this Bench that provisions of section 14A were applicable to this case and non-consideration of provisions of section 14A by Assessing Officer was error. However, claim of assessee is that such error did not cause or result into prejudice to revenue. Therefore, ld. AR has contended that twin conditions mentioned in section 263 were not satisfied so as to enable CIT(A) to assume jurisdiction under section 263 of Act. Now question that requires to be decided by this Bench is whether CIT(A) was justified in law to exercise his powers vested under section 263 of Act in setting aside assessment order read with order under section 154 of Act passed by Assessing Officer. Before dealing with merits of case, it would be relevant to reproduce herein main provisions of section 263 of Act which read as under: '263. (1) Commissioner may call for and examine record of any proceeding under this Act, and if he considers that any order passed therein by Assessing Officer is erroneous insofar as it is prejudicial to interests of revenue, he may, after giving assessee opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as circumstances of case justify, including order enhancing or modifying assessment, or cancelling assessment and directing fresh assessment. Explanation. - For removal of doubts, it is hereby declared that, for purposes of this sub-section, - (a) ** ** ** (i) ** ** ** (ii) ** ** ** (b) 'record' shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at time of examination by Commissioner; (c)Where any order referred to in this sub-section and passed by Assessing Officer had been subject-matter of any appeal filed on or before or Assessing Officer had been subject-matter of any appeal filed on or before or after 1st day of June, 1988, powers of Commissioner under this sub- section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after expiry of two years from end of financial year in which order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), order in revision under this section may be passed at any time in case of order which has been passed in consequence of, or to give effect to, any finding or direction contained in order of Appellate Tribunal, High Court or Supreme Court. Explanation. - In computing period of limitation for purposes of sub- section (2), time taken in giving opportunity to assessee to be reheard under proviso to section 129 and any period during which any proceeding under this section is stayed by order or injunction of any court shall be excluded.' bare reading of aforesaid section shows that ld. CIT(A) is vested with powers to call for and examine records of any proceedings under Act and consider if order passed by Assessing Officer is erroneous and prejudicial to interests of revenue. Thus, in order to confer jurisdiction on CIT under section 263, twin conditions i.e., (i) that order passed by Assessing Officer must be erroneous and (ii) same should be prejudicial to interests of revenue must be satisfied. Both conditions should be satisfied simultaneously. In case, order passed under section 263 is erroneous, but same is not prejudicial to interests of revenue, CIT shall have no jurisdiction to revise such order. Likewise, if order is prejudicial to interest of revenue, but is not erroneous, CIT, would have no jurisdiction to revise such order under section 263 of Act. Thus, it is quite clear that in order to confer jurisdiction on CIT under section 263, both conditions mentioned above must be fulfilled simultaneously. This issue was considered by Hon'ble Supreme Court in case of Malabar Industrial Co. Ltd. (supra) relied upon by ld. AR, where it was held that pre-requisite for exercise of jurisdiction by CIT is that twin conditions must be satisfied i.e., (i) order of Assessing Officer sought to be revised is erroneous and (ii) it is prejudicial to interests of revenue. Apex Court observed that if one of these conditions is absent i.e., if order of Assessing Officer is erroneous but is not prejudicial to revenue - recourse cannot be had to section 263 of Act. same view has been held by various other judgments relied upon by ld. AR. 7.1 Now aspect that requires to be considered by this Bench is whether both conditions laid down under section 263 can be said to have been fulfilled in this case. In order to answer this issue, we have to first find out meaning of expressions used in section assessment order being 'erroneous' and 'prejudicial to interests of revenue'. This issue was also considered by Hon'ble Supreme Court in aforesaid case of Malabar Industrial Co. Ltd. (supra). Hon'ble Apex Court held that expression 'erroneous' would mean incorrect assumption of facts or incorrect application of law. Apex Court further observed that even assessment orders passed without applying principles of natural justice or without application of mind would be regarded as erroneous. As regards expression 'prejudicial to interests of revenue', Apex Court observed that this is not expression of art and was not defined in Act. However, it was observed that in its ordinary meaning, it is of wide import and was not confined to loss of tax. scheme of Act is to levy and collect tax in accordance with provisions of Act and this task is entrusted to revenue. If due to erroneous order of ITO, revenue is loosing tax lawfully payable by person, it will certainly be prejudicial to interests of revenue. Hon'ble Apex Court also observed that phrase 'prejudicial to interests of revenue' has to be read in conjunction with erroneous order passed by Assessing Officer. relevant findings recorded by Apex Court on page 83 of ITR 243 are as under: 'A bare reading of section 263 of Income-tax Act, 1961, makes it clear that prerequisite for exercise of jurisdiction by Commissioner suo motu under it, is that order of Income-tax Officer is erroneous insofar it is prejudicial to interests of revenue. Commissioner has to be satisfied of twin conditions namely (i) order of Assessing Officer sought to be revised is erroneous and (ii) it is prejudicial to interests of revenue. If one of them is absent - if order of Income-tax Officer is erroneous but is not prejudicial to interests of revenue or if it is not erroneous but is prejudicial to revenue - recourse cannot be had to section 263(1) of Act. provision cannot be invoked to correct each and every type of mistake or error committed by Assessing Officer, it is only when order is erroneous that section will be attracted. incorrect assumption of facts or incorrect application of law will satisfy requirement of order being erroneous. In same category fall orders passed without applying principles of natural justice or without application of mind. phrase 'prejudicial to interests of revenue' is not expression of art and is not defined in Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. scheme of Act is to levy and collect tax in accordance with provisions of Act and this task is entrusted to revenue. If due to erroneous order of Income-tax Officer, revenue is losing tax lawfully payable by person, it will certainly be prejudicial to interests of revenue. phrase 'prejudicial to interests of revenue' has to be read in conjunction with erroneous order passed by Assessing Officer. Every loss of revenue as consequence of order of Assessing Officer, cannot be treated as prejudicial to interests of revenue, for example, when Income-tax Officer adopted one of courses permissible in law and it has resulted in loss of revenue, or where two views are possible and Income-tax Officer has taken one view with which Commissioner does not agree, it cannot be treated as erroneous order prejudicial to interests of revenue unless view taken by Income- tax Officer is unsustainable in law.' [Emphasis supplied] From bare reading of above judgment, it is clear that twin conditions laid down in section 263 must be satisfied simultaneously before assuming jurisdiction by CIT. However, Supreme Court has also clarified that if Assessing Officer has taken one of courses permissible in law or where two views are possible and ITO has taken one view with which CIT does not agree, it cannot be treated as erroneous or prejudicial to interests of revenue unless view taken by ITO is unsustainable in law. 7.2 Now present case also requires to be decided by applying above tests laid down by Apex Court i.e. whether twin conditions laid down for exercise of powers under section 263 by CIT could be considered to have been satisfied. 7.3 Now admittedly, failure on part of Assessing Officer to consider provisions of section 14A while allowing exemption in respect of income aggregating to Rs. 36.10 crores was contrary to provisions of Act. We have already mentioned that CBDT has clarified that income referred to under section 10(23G) is only net income to be computed in accordance with provisions of Act. Same is position in respect of income claimed exempt under section 10(15) and 10(33) of Act. It is not case where Assessing Officer has examined case from point of view of section 14A and then has recorded finding that no disallowance for expenses incurred in relation to income claimed exempt was called for. Assessing Officer has totally overlooked this fact. Even assessee had not apportioned any expenditure towards income claimed exempt in return of income. Therefore, such order of Assessing Officer was erroneous within meaning of section 263 of Act as Assessing Officer failed to examine disallowance of expenses called for under section 14A of Act. 7.4 Now other condition that order must be prejudicial to interest of revenue also needs to be satisfied before order passed under section 263 is considered to be valid. We are unable to accept contention of assessee that it had not incurred any expenditure for earning exempt income and, therefore, no disallowance was called for. It is claim of assessee that sufficient amount of surplus funds were available with assessee to make investment in shares or long-term advances to enterprises engaged in providing infrastructure facility and, therefore, no disallowance was called for. We are unable to accept this position, for simple reason that Assessing Officer has not examined this issue at all either at time of completing assessment or at time of passing order under section 154. No finding has been recorded by Assessing Officer to effect that assessee had not incurred any expenditure for earning huge amount of exempt income of Rs. 36.10 crores. What was required to be done by Assessing Officer is to enquire into expenditure incurred by assessee for earning income claimed exempt under aforesaid sections of Act. In fact, assessee had itself referred to decision of ITAT, Amritsar Bench in assessee's own case in ITA No. 68 (Asr.)/1997 for assessment year 1992-93 (a copy of order placed at pages 13 to 15 of paper book). said decision related to deduction in respect of dividend income of Rs. 2,13,60,578 under section 80M of Act. Assessing Officer had disallowed expenses of Rs. 21,36,579 at rate of 10 per cent of gross amounts of dividends. However, on appeal, ld. CIT(A) restricted disallowance to Rs. 25,000 on ground that there was only one clerk working in Investment Department who received warrant from Unit Trust of India and deposited with bank for collection. On further appeal, Tribunal upheld order of CIT(A). said decision is confined to its own facts, where dividend income was shown at meagre amount of Rs. 2.13 crores from UTI, and issue related to deduction under section 80M. case was not considered from point of disallowance to be made under section 14A i n respect of income claimed as exempt. For assessment year under consideration, assessee has earned huge amount of income of Rs. 36.10 crores which was claimed exempt. total investment for earning such income must be more than 300 crores. There has got to be team of professionals for research, planning, monitor, management of investment port folio. One clerk cannot manage huge amount of investment which require serious consideration and due application of mind. Therefore, expenses incurred for earning such income needed to be determined and disallowed. extent of expenses may vary depending on facts of each case. In those cases, where only business carried on by assessee is to make investments in shares or of nature for which income is exempt, entire expenses incurred in relation to such income would warrant disallowance under section 14A of Act. However, if there are only one or two investments made in last years say units of UTI for which single dividend warrant is received and there is no regular staff employed, there would hardly be any establishment expenses incurred for earning such income and, therefore, disallowance cannot be made on proportionate basis. What is to be seen is expenditure incurred in relation to income, which does not form part of total income. disallowance may not be made on proportionate basis but facts remains that expenditure incurred in relation to such income need to be determined and disallowed. This exercise was not done by Assessing Officer. Even for assessment year 1992-93, when income was only 2.13 crores, disallowance of expenses of Rs. 25,000 was upheld by Tribunal. Therefore, when we consider income of Rs. 36.10 crores, disallowance would be of much higher magnitude. In any case enquiry and examination was required to be made by Assessing Officer at time of completing assessment and passing order under section 154. relevant details were, to be called for and examined. Therefore, order of Assessing Officer was definitely erroneous and also prejudicial to interest of revenue insofar as disallowance of expenses under section 14A is concerned. 7.5 We may mention that various decisions relied upon by both parties are on issue of considering expenses for purpose of allowing deduction under section 80M. There are some decisions, which are with reference to provisions of section 14A of Act. Two decisions of ITAT, Delhi Benches in cases of Eicher Ltd. (supra) and Maruti Udyog Ltd. (supra) support view that expenditure actually incurred in relation to income which does not form part of total income is to be made and disallowance of management expenses on proportionate basis cannot be made. However, there is unanimity of view in all decisions that expenditure incurred in relation to income claimed exempt which does not form part of income has got to be disallowed as per provisions of section 14A. In case of Maruti Udyog Ltd. (supra), Tribunal has held that any expenditure which is proved to have nexus directly or indirectly with funds for earning exempt income has to be disallowed. extent and magnitude of disallowance is to be determined at time of completing assessment. But this does not vitiate order of CIT, Jammu, so far it relates to non-consideration of disallowance of expenditure under section 14A of Act. decision of ITAT, Delhi Bench in case of Sexa Securities & Finance Co. Ltd. (supra) is directly on issue where order passed by CIT under section 263 on account of non-consideration of disallowance of expenses under section 14A was held to be valid in law. Therefore, this decision also supports case of revenue. As regards contention of assessee that order passed under section 263 is bad in law because he has acted merely on proposal of Addl. Commissioner of Income-tax without independent application of mind, we do not find any substance in same. Para-2 of impugned order clearly shows that along with proposal, Addl. CIT had also sent case records and these were examined by CIT. Therefore, it cannot be said that CIT, Jammu acted merely on proposal sent to him. Therefore, this plea is rejected and judgment of Hon'ble Gauhati High Court in case of B&A Plantation & Industries Ltd. v. CIT 290 ITR 395 is not applicable to facts of this case. Therefore, we are of opinion that order of assessment read with order under section 154 was erroneous and prejudicial to interest of revenue so far as disallowance of expenses under section 14A in relation to income claimed exempt is concerned. Both conditions laid down in section 263 are satisfied. However, before parting with this issue, we wish to mention that quantum of expenses to be disallowed under section 14A has to be determined at time of completing set aside assessment. If it is not acceptable to assessee, it may challenge same in appeal before CIT(A). 8. Thus, having regards to these facts and circumstances of case and legal position discussed above, we uphold order of CIT under section 263 so far it relates to non-consideration of provisions of section 14A while allowing exemption of income of Rs. 36.10 crores. 9. Now we take up second ground on which CIT has revised order under section 263. same relates to allowing of exemption under section 10(23G) of Act. undisputed facts of case are that section 10(23G) was introduced by Finance (No. 2) Act, 1996 with effect from 1-4-1997. assessee had claimed and was being allowed exemption of its income under section 10(23G) for earlier as well as subsequent assessment years in respect of which assessment under section 143(3) had been made. Before we record our findings on validity of action of CIT on this issue, it would b e appropriate to reproduce relevant provisions of section 10(23G) applicable to assessment year under consideration. same are applicable to assessment year under consideration. same are reproduced as under: '10(23G): any income by way of dividends, (other than dividends referred to section 115-O), interest or long-term capital gains of infrastructure capital fund or infrastructure capital company or cooperative bank from investments made on or after 1st day of June, 1998 by way of shares of long-term finance in any enterprise or undertaking wholly engaged in business referred to in sub-section (4) of section 80-IA or housing project referred to in sub-section (10) of section 80-IB or hotel project or hospital project and which has been approved by Central Government on application made by it in accordance with rules made in this behalf and which satisfies prescribed conditions. Explanation 1.-For purposes of this clause,- (a) 'infrastructure capital company' means such company as has made investments by way of acquiring shares or providing long-term finance to enterprise wholly engaged in business referred to in this clause; (b) 'infrastructure capital fund' means such fund operating under trust deed registered under provisions of Registration Act, 1908 (16 of 1908) established to raise monies or providing long-term finance to enterprise wholly engaged in business referred to in this clause; (c) ** ** ** (d)'long-term finance' shall have meaning assigned to it in clause (viii) of sub-section (1) of section 36; (e)'co-operative bank' shall have meaning assigned to it in clause (dd) of section 2 of Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961); (f)'interest' includes any fee or commission received by financial institution for giving any guarantee to, or enhancing credit in respect of, enterprise which has been approved by Central Government for purposes of this clause.' plain reading of above section shows followings: (a)the exemption provided under this section is applicable to 'Infrastructure Capital Fund' or 'Infrastructure Capital Company' or 'Co- operative Bank'; (b)the income should be in nature of dividend (not being covered under section 115-O of Act); or long-term capital gains or interest; (c)the aforesaid income is derived from investments made on or after June, 1998 by way of shares or long-term finance in any infrastructure enterprise; (d)the infrastructure enterprise is approved by Central Government on application made by it in accordance with prescribed rules; and (e)for this purpose, 'Infrastructure capital company' means company which has made investments by way of acquiring shares or providing long-term finance to enterprise wholly engaged in aforesaid business. Nowhere section and explanation thereto say that 'Infrastructure capital company' should be established only for purposes of mobilising resources for financing infrastructure facilities. There is no dispute about fact that income in respect of which assessee has claimed exemption has been earned by way of dividends on investment in shares and interest on long-terms finance in infrastructure enterprise. claim of assessee is that it is covered under expression 'Infrastructure capital company' because it has made investment by way of acquiring shares or long-term finance to enterprises engaged in business of providing infrastructure facility. Both revenue and assessee have referred to Explanatory Notes on provisions of Finance (No. 2) Act, 1996, in Circular No. 762, dated 18-2-1998 explaining purpose of providing such exemption. We consider it appropriate to reproduce hereunder relevant paragraphs explaining provisions inserted in Act: '17.1 In recognition of need for adequate infrastructure facility which is vital for accelerating economic development of country, existing provisions of Income-tax Act provide five year tax holiday to enterprise carrying on business of developing, maintaining and operating any infrastructure facility. However, in order to attract further investment to this sector, urgent need has been felt for providing more tax incentives to investors. 17.2 Act, therefore, provides tax exemption to such infrastructure capital funds and companies which are established for purposes of mobilising resources for financing infrastructure facilities. 17.3 Accordingly, any income by way of dividends, interest or long-term capital gains of infrastructure capital fund or infrastructure capital company from investment made by way of shares or long-term finance in any enterprise carrying on business of developing, maintaining and operating any infrastructure facility which fulfils conditions specified in sub-section (4A) of section 80-IA has been exempted from income-tax. 17.4 expression 'infrastructure capital fund' shall mean fund operating under trust deed registered under provisions of Registration Act, 1908 established to raise moneys for investments by way of acquiring shares or providing long-term finance to enterprise engaged in providing infrastructure facility. expression 'infrastructure capital company' shall mean company which has made investment by way of acquiring shares or providing long-term finance to enterprise engaged in business of providing infrastructure facility. expression 'infrastructure facility' shall mean road, highway, bridge, airport, port, rail system, or any other public facility of similar nature as may be notified by Central Board of Direct Taxes in this behalf in Official Gazette. It will also include water supply projects, sewerage, sanitation or irrigation systems. expression 'long-term finance' shall mean any loan or advance which is repayable along with interest during period of not less than 5 years.' While revenue supports its action by referring to para 17.2 of above circular which provides tax exemption to 'infra- structure capital fund' and 'infrastructure capital company', which are established for purposes of mobilising resources for financing infrastructure facilities. It is case of revenue that only such 'infrastructure capital companies' which are established for purposes of mobilising resources for financing infra- structure facilities are entitled to exemption of its income under section 10(23G). basic purpose of providing tax incentives is to encourage investment in infrastructure facilities which are vital for economic development of country. Earlier, Legislature had provided incentives to enter-prises engaged in business of developing, maintaining and operating any infrastructure facility in form of sections 80-IA and 80-IB of Act. However, these measures were not found adequate. Therefore, Legislature felt that tax incentives should also be provided to investors in such sector. Therefore, section 10(23G) was introduced in Act. There is no dispute about fact that assessee is banking company. essential feature of business of banking company is to mobilise resources from public and lend it on interest to various sectors. revenue has not denied that assessee had indeed made investment in shares and providing long-term finance to enterprises engaged in infrastructural facility. Therefore, all conditions laid down for claiming exemption under section 10(23G) are fulfilled by assessee. Therefore, we are of opinion that it is not proper to take narrow view of issue when assessee had in fact made investments in shares and financed enterprises engaged in providing infrastructure facilities on long-term basis. We therefore, feel that it is not necessary that 'Infrastructure Capital Company' should be formed solely for purpose of mobilising resources for financing infrastructure facilities. If it includes one of objects of Banking business, same should be sufficient to entitle assessee to claim exemption of its income under section 10(23G). This view also finds support from fact that subsequently this benefit of section 10(23G) has been extended to Co-operative Banks, though such banks have also not been set up for purpose of mobilising resources for financing infrastructure facilities. Therefore, we are of opinion that assessee falls in category of 'infrastructure capital company' entitled to exemption under section 10(23G). 9.1 view that banks are entitled to exemption of its income falling in nature mentioned under section 10(23G) is reinforced by recent News Item which appeared in Economic Times dated January 19, 2008 and is reproduced in 297 ITR (Part-4) page 5 under caption 'News-Brief'. same is reproduced as under: 'Banks want tax exemptions for core funding restored back Banks have urged Finance Ministry to restore tax exemption they enjoyed on investments in infrastructure projects. income-tax exemption was provided under section 10(23G) of Income-tax Act. banking sector feels removal of this exemption has resulted in increased interest rates for this sector.[[[[[ 'The floor rate of interest for infrastructure projects is around 12 per cent depending on projects and borrowers. If banks were given exemption, 50-75 basis point concession can be given, after taking into account cost of funds and other operational costs', said Punjab National Bank GM, credit. When exemption was removed, banks had increased rate of interest on existing infrastructure projects after negotiating with borrowers. Under section 10(23G), banks were allowed to claim deduction on interest earned on long-term lending to infrastructure industries. This section was deleted by Finance Act, 2006. provision exempted specified income by way of dividend, interest and long-term capital gains of infrastructure capital funds or infrastructure capital companies from investments in shares and long-term finance to enterprise wholly engaged in infrastructure business, housing hotel or hospital industry. infrastructure capital company is defined as one that carries on business of developing, maintaining, operating various infrastructure projects, developing, special economic zones, developing and building housing projects, constructing certain specified hotels or specified hospitals. Government, in 2006, had justified removing exemption since interest rate regime and softened, reducing overall cost of projects. Even if banks were given exemption on income from investment in infrastructure projects, it remains to be seen whether they would pass on benefit to borrower. There are three key issues that are constraints for banking sector while lending to infrastructure-availability of long-term debt, sectoral limits for various infrastructure - availability of long-term debt, exposure to single and group borrowers (Source: Economic Times, dated January 19, 2008). [Emphasis supplied is ours] From above News Item, it is clear that banking sector was enjoying exemption under section 10(23G) which has been deleted by Finance Act, 2006. If it were not so, there was no need for banks to make such representation. 9.2 Further, it is fact that assessee has been allowed exemption in t h e earlier and subsequent assessment years. facts of case for assessment year under consideration are same as facts for other assessment years. In fact, we were informed that Assessing Officer had initiated proceed- ings under section 147 for assessment year 2000-01 (a copy placed at page 208 of paper book). assessee had filed detailed reply at pages 212 and 213 of paper book and thereafter, proceedings for assessment year 2000-01 were dropped. This shows that revenue has accepted that assessee is indeed entitled to exemption under section 10(23G) of Act. Since facts of case for assessment year under consideration are similar to facts of case for other assessment years, we are of opinion that principle of consistency also deserves to be followed. Reliance is placed on following judgments: (i) judgment of Hon'ble Delhi High Court in case of Lovely Bal Shiksha Parishad (supra). (ii)The judgment of Hon'ble Supreme Court in case of Radhasoami Satsang (supra). (iii)The judgment of Hon'ble Punjab and Haryana High Court in case of Leader Valves Ltd. (supra). (iv)The judgment of Hon'ble Supreme Court in case of Berger Paints India (supra). 10. Thus, having regard to these facts and circumstances of case and legal position discussed above, we are of considered opinion that ld. CIT was not justified in holding that assessee was not entitled to exemption under section 10(23G) of Act. assessment order read with order under section 154 for allowing exemption of income under section 10(23G) cannot be considered as erroneous and prejudicial to interests of revenue. Therefore, order of CIT under section 263 on this issue is set aside. Accordingly, this part of ground is allowed. 11. In result, appeal filed by assessee is partly allowed. *** JAMMU & KASHMIR BANK LTD. v. ASSISTANT COMMISSIONER OF INCOME TAX