Section 263 revision fails where the Assessing Officer made inquiries and adopted a plausible assessment view.

Revision under section 263 was unsustainable because the assessment order was not shown to be both erroneous and prejudicial to the interests of the Revenue. The Assessing Officer had called for details, examined the assessee's explanations on the section 80IB(10) deduction, work-in-progress valuation, development rights, and related project receipts, and adopted a plausible view. A revisional authority cannot invoke section 263 merely because inquiry was not discussed in greater detail or because another view is possible. The assessment was restored, and the assessee's claim succeeded on the facts and law.

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Issues: Whether the revisionary order under section 263 of the Income-tax Act, 1961, setting aside the assessment and directing a fresh assessment was justified on the ground that the Assessing Officer had not made proper inquiry into the assessee's claim for deduction under section 80IB(10), valuation of work-in-progress, and receipt of certain project-related charges.

Analysis: Section 263 can be invoked only when the assessment order is both erroneous and prejudicial to the interests of the Revenue. A distinction must be maintained between lack of inquiry and inadequate inquiry. If the Assessing Officer has called for details, examined the material, and taken a plausible view, the Commissioner cannot revise the assessment merely because a fuller discussion was not recorded or because a different view is possible. On the record, the Assessing Officer had sought details, obtained comparative explanations, and examined the assessee's claim with reference to the governing facts and prior appellate decisions. The objections regarding the development rights, the area of residential units, the work-in-progress valuation, and the AEC/AUDA and student-fee receipts were either examined by the Assessing Officer or were not shown to establish a legal error in the assessment.

Conclusion: The revision under section 263 was not sustainable, as the assessment order could not be said to be erroneous in the requisite sense.

Final Conclusion: The assessment order was restored and the assessee's claim succeeded because the Commissioner's revisionary interference was held unjustified on the facts and law.

Ratio Decidendi: Revision under section 263 is permissible only where the assessment order is both erroneous and prejudicial to the Revenue, and a revisional authority cannot substitute its own view where the Assessing Officer has made inquiries and adopted a plausible course of assessment.

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