Tribunal quashes revisionary order under section 263, upholding Assessing Officer's decision.

The Tribunal quashed the revisionary order under section 263, ruling that the Assessing Officer's decision was not erroneous or prejudicial to revenue. The Tribunal held that the AO's assessment aligning with the High Court's decision and Supreme Court precedents was valid. The appeal was allowed, and the order was pronounced on 28.11.2013.

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Issues: Whether the Commissioner was justified in invoking revisional jurisdiction under section 263 of the Income-tax Act, 1961 to cancel the assessment order on the ground that it was erroneous and prejudicial to the interests of revenue.

Analysis: The assessment order under section 143(3) read with section 147 was passed after reopening, and the issue of taxability of enhanced compensation and interest thereon was examined in the backdrop of the pending compensation dispute. The Tribunal noted that the reassessment order was not an order passed without enquiry; rather, it was made in the context of the then-prevailing factual and legal position, including the jurisdictional High Court's view on similar land-acquisition compensation matters. The Tribunal further relied on the principle that section 263 cannot be used to revise an order merely because a later view is possible or because a subsequent development suggests a different tax treatment, when the Assessing Officer had acted in accordance with the law applicable at the time and in line with binding jurisdictional precedent.

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

Ratio Decidendi: Revisional power under section 263 cannot be exercised where the Assessing Officer's view is supported by binding jurisdictional precedent and cannot be branded erroneous merely because a different view is later perceived or because of subsequent legal developments.

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