Section 263 revision barred by merger doctrine and proper enquiry, leaving the original assessment undisturbed.

Revisional jurisdiction under section 263 could not be exercised over an assessment issue that had already been carried in appeal and merged with the appellate order on that point. The article also notes that section 263 cannot be invoked merely because a higher level of enquiry is preferred where the Assessing Officer had issued questionnaires, examined replies, and considered the relevant receipts and expenses before completing assessment. On that factual basis, the revisional order was set aside and the original assessment was left undisturbed.

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Issues: (i) whether the revisional order under section 263 could be sustained when the assessment issue had already been carried in appeal and merged with the appellate order; (ii) whether the assessment order was erroneous and prejudicial to the interests of revenue for want of proper enquiry.

Issue (i): whether the revisional order under section 263 could be sustained when the assessment issue had already been carried in appeal and merged with the appellate order.

Analysis: The assessment on the disputed head of income had already been examined in appeal before the appellate authority. Once the subject matter of assessment was pending in appeal and later decided, the assessment order stood merged with the appellate order on that issue. In such circumstances, the revisional jurisdiction could not be exercised to reopen the same matter.

Conclusion: The revisional order was not sustainable on the merged issue.

Issue (ii): whether the assessment order was erroneous and prejudicial to the interests of revenue for want of proper enquiry.

Analysis: The record showed that the Assessing Officer had issued questionnaires, considered the assessee's replies, examined the hostel receipts and expenses, and made adjustments before completing the assessment. The case was one of enquiry having been made and a view having been taken, not of absence of enquiry. A different perception about the level of enquiry was insufficient to invoke section 263.

Conclusion: The assessment order could not be treated as erroneous and prejudicial to the interests of revenue on this ground.

Final Conclusion: The revisional order was set aside and the assessment as originally completed was left undisturbed.

Ratio Decidendi: Revisional jurisdiction under section 263 cannot be invoked where the assessment issue has merged with the appellate order, and it also cannot rest merely on a different view about the adequacy of enquiry when the Assessing Officer has applied his mind and conducted enquiries.

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