Section 263 revision fails where the Assessing Officer made enquiries and adopted a plausible view on medical conference expenses.

Section 263 revision is not justified where the Assessing Officer has made enquiries, applied his mind, and adopted a legally permissible view on the allowability of medical conference expenses under section 37. The Tribunal noted that disallowances were already made for sales promotion and freebies to doctors in line with the CBDT circular and MCI regulations, and that the Principal Commissioner could not invoke revision merely to seek a different view or further enquiry. It also accepted that an earlier Tribunal view allowing similar expenditure remained a possible view and could not be disregarded for revisionary action. The revision order was therefore quashed in favour of the assessee.

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Issues: Whether revision under section 263 of the Income-tax Act, 1961 was justified on the ground that the Assessing Officer had not properly examined the allowability of medical conference expenses and had allowed expenditure hit by Explanation 1 to section 37.

Analysis: The assessment records showed that the Assessing Officer had applied his mind to the expenditure issue and had made disallowances in respect of sales promotion/freebies to doctors in line with the CBDT circular and the MCI regulations. On the revisionary record, the disallowance of medical conference expenses was sought only because the Principal Commissioner preferred a different view and desired further enquiry. The Tribunal held that where the Assessing Officer has made enquiries and taken a legally permissible view, section 263 cannot be invoked merely because the Commissioner considers the enquiry inadequate or seeks another enquiry. The Tribunal also noted that the earlier Tribunal view allowing similar expenditure remained a permissible view and could not be ignored for revisionary action.

Conclusion: The revision order under section 263 was unsustainable and was quashed; the issue was decided in favour of the assessee.

Ratio Decidendi: Section 263 cannot be used to substitute the Commissioner's opinion for a plausible assessment view where the Assessing Officer has made enquiries and adopted one of two legally sustainable views.

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