Revision under section 263 cannot replace a permissible tax view on deduction eligibility when the assessment applied mind.

Revision under section 263 could not be invoked to withdraw deduction under section 80P(2)(a)(i) where the Assessing Officer had already applied his mind to the assessee's eligibility and adopted a legally permissible view. The order recorded that the assessee was treated, for income-tax purposes, as a regional rural bank eligible for the deduction under the Regional Rural Banks Act, 1976. A brief assessment order was not enough to show error or prejudice, and the Commissioner could not substitute a different view merely because section 80P(4) was considered applicable. The revision order was therefore quashed.

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Issues: Whether the Commissioner could invoke revisionary jurisdiction under section 263 of the Income-tax Act, 1961 to withdraw deduction under section 80P(2)(a)(i) on the ground that the assessee was a co-operative bank and not a co-operative society.

Analysis: The deduction claim had been examined by the Assessing Officer, who recorded that the assessee was a regional rural bank and, for income-tax purposes under the Regional Rural Banks Act, 1976, was treated as a co-operative society eligible for deduction under section 80P(2)(a)(i). Even if the assessment order was brief, the reasoning showed application of mind to the eligibility question. The Commissioner sought to substitute a different view on the effect of section 80P(4), but revision under section 263 is not justified where the Assessing Officer has adopted one of the permissible views in law. An order cannot be branded erroneous and prejudicial merely because the Commissioner prefers another view, particularly when the assessee's claim was a legally possible one.

Conclusion: The revision order under section 263 was not sustainable and was quashed.

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