Section 263 revision fails where the Assessing Officer adopts a plausible view and revenue prejudice is not shown.

Delay in filing the appeals was condoned because the explanation showed bona fide professional advice, supported by affidavit, and a genuine misunderstanding; the liberal test for sufficient cause was satisfied, so the appeals were admitted. On the merits, revision under section 263 failed because the Assessing Officer had adopted one of the possible views on the year of chargeability of capital gains, based on the record and the timing of transfer. An assessment is revisable only if it is both erroneous and prejudicial to the interests of the revenue, and a plausible view cannot be treated as erroneous. As the same transaction had already been taxed in later assessment years, prejudice was not established and the revisional orders were quashed.

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Issues: (i) whether the substantial delay in filing the appeals deserved condonation on showing sufficient cause; (ii) whether the revisional orders under section 263 were valid where the Assessing Officer had taken one of the possible views on the year of chargeability of capital gains and the revenue had already taxed the same transaction in later assessment years.

Issue (i): whether the substantial delay in filing the appeals deserved condonation on showing sufficient cause.

Analysis: The delay was explained as having arisen from bona fide professional advice that separate appeals were unnecessary because the capital gains issue had been accepted in later assessment years. The explanation was supported by affidavit and the record showed a genuine misunderstanding about the need to challenge the revisional orders immediately. The principle governing condonation requires a liberal approach where sufficient cause is shown and the emphasis is on advancing substantial justice.

Conclusion: The delay was rightly condoned, and the appeals were admitted.

Issue (ii): whether the revisional orders under section 263 were valid where the Assessing Officer had taken one of the possible views on the year of chargeability of capital gains and the revenue had already taxed the same transaction in later assessment years.

Analysis: The Assessing Officer had examined the material and taken the view that no transfer occurred during the relevant previous year and that the amount received was only an advance. That view was supported by the contemporaneous record and by the legal position on the timing of transfer and chargeability. Revision under section 263 is permissible only when the assessment order is both erroneous and prejudicial to the interests of the revenue. Where the Assessing Officer adopts one of the possible views, the order cannot be treated as erroneous. Further, since the same capital gains had already been brought to tax in later assessment years, prejudice to the revenue was not shown.

Conclusion: The revisional orders under section 263 were unsustainable and were quashed.

Final Conclusion: The assessee succeeded on the revision challenge, while the appeals against the consequential orders became infructuous after the revisional orders were set aside.

Ratio Decidendi: Revision under section 263 cannot be sustained where the Assessing Officer has adopted a plausible view on the facts and law and the order is neither erroneous nor prejudicial to the interests of the revenue; delay in appeal may be condoned on a bona fide and sufficiently explained cause shown to advance substantial justice.

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