Section 263 revision fails where the Assessing Officer examined details and no prejudice to Revenue was shown.

Revision under section 263 requires the assessment order to be both erroneous and prejudicial to the interests of the Revenue. Where the Assessing Officer issued a questionnaire, sought particulars on additions to assets and capital work in progress, and the assessee furnished the relevant material, the record indicated application of mind. The absence of elaborate reasoning in the assessment order did not by itself justify revision, and a mere view that further enquiry should have been made was insufficient. As no finding of prejudice to the Revenue was recorded, the revisionary order was held unsustainable and was set aside.

---

---

Issues: Whether the revisionary order passed under section 263 of the Income-tax Act, 1961 was sustainable when the Assessing Officer had called for details, the assessee had furnished the relevant material, and no prejudice to the Revenue was demonstrated.

Analysis: The assessment records showed that the Assessing Officer had issued a questionnaire and sought particulars regarding additions to assets and capital work in progress, and the assessee had supplied the required details. On that material, the inference was that the Assessing Officer had applied his mind, even though the assessment order did not record elaborate reasons. Revision under section 263 requires both conditions to coexist, namely that the order is erroneous and prejudicial to the interests of the Revenue. The Commissioner did not record a finding showing how the assessment caused prejudice to the Revenue, and a mere view that further enquiry ought to have been made was insufficient to justify revision.

Conclusion: The revisionary order was unsustainable and was set aside.

Ratio Decidendi: Section 263 can be invoked only when the assessment order is both erroneous and prejudicial to the interests of the Revenue; absence of one of these conditions defeats revision.

---