Revision under section 263 fails where the Assessing Officer took a permissible view after scrutiny of the deduction claim.

Revision under section 263 was held unwarranted because the assessment order was neither erroneous nor prejudicial to the Revenue. The Assessing Officer had examined the deduction claim, called for details and supporting documents, and allowed the claim after scrutiny, so the case was not one of lack of enquiry. The due-date requirement under section 80AC was treated as a debatable issue at the relevant time, and the Assessing Officer had adopted one of the permissible views. Since a revision cannot be made merely because the Commissioner prefers another view, the deduction under section 80IB could not be withdrawn and the assessee's appeal succeeded.

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Issues: Whether the Commissioner was justified in invoking revisional jurisdiction under section 263 of the Income-tax Act, 1961 to withdraw deduction under section 80IB on the ground that the return was filed beyond the due date under section 139(1) and section 80AC rendered the claim inadmissible.

Analysis: The conditions for revision under section 263 require both error in the assessment order and prejudice to the interests of the Revenue. The assessment record showed that the Assessing Officer had examined the deduction claim during scrutiny and allowed it after calling for details and supporting documents, so the case was not one of absence of enquiry. The legal position on whether the due-date requirement in section 80AC was mandatory or directory was debatable at the relevant time, and the Assessing Officer had adopted one of the permissible views. Where two views are possible and the Assessing Officer takes one of them, the order cannot be revised merely because the Commissioner prefers another view, unless the view taken is unsustainable in law.

Conclusion: The revision under section 263 was not justified and the deduction could not be withdrawn on that basis. The appeal was allowed in favour of the assessee.

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