Section 263 revision is barred where the Assessing Officer made enquiries and took one permissible view.

Revision under section 263 is limited to orders that are both erroneous and prejudicial to the interests of the Revenue. Where the Assessing Officer issued notices, examined audited accounts, bank statements, confirmations, creditor and debtor details, and other relevant material before completing assessment under section 143(3), the Commissioner cannot invoke revision merely because a deeper or more extensive enquiry is thought desirable. The distinction between absence of enquiry and inadequate enquiry remains decisive: if enquiry was made and one permissible view was taken, revision cannot be used to order a fresh roving investigation or substitute another opinion unless the assessment is shown to be unsustainable in law.

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Issues: Whether the revisionary order passed under section 263 could stand when the Assessing Officer had conducted enquiries and verified the assessee's audited accounts, confirmations, bank statements and other details, and whether the Commissioner could invoke revision merely because further or deeper enquiry was considered desirable on issues such as trading loss, capital withdrawals, unsecured loans, sundry creditors, interest-free advances, premises ownership, and disallowance under section 14A.

Analysis: The assessment record showed that the Assessing Officer had issued notice under section 142(1), called for relevant particulars, and examined the return, audited financial statements, statement of affairs, capital account, bank statements, creditor and debtor details, and loan confirmations before completing assessment under section 143(3). On the Commissioner's objections, the record did not establish that any material issue had been left wholly unattended; at the highest, the view taken was that the enquiry was not deep enough. The trading-loss objection was also found to rest on an incorrect computation because export incentives and exchange fluctuation gains were not considered. The other objections relating to withdrawals, loans, creditors, premises, and section 14A were likewise matters on which enquiry had been made and a view had been taken. Applying the settled distinction between absence of enquiry and inadequate enquiry, the revisionary power could not be used to direct the Assessing Officer to conduct a fresh roving enquiry or to substitute a different opinion without demonstrating that the assessment order was unsustainable in law.

Conclusion: The invocation of section 263 was not justified. The order was, at the most, a case of inadequate enquiry and not lack of enquiry, so the revisionary order was quashed and the assessee succeeded.

Final Conclusion: The assessment order was restored by setting aside the revisionary interference under section 263, leaving the original assessment undisturbed.

Ratio Decidendi: Revision under section 263 is permissible only when the assessment order is both erroneous and prejudicial to the interests of the Revenue, and where the Assessing Officer has made enquiries and taken one permissible view, the Commissioner cannot revise the order merely to require further enquiry unless the order is shown to be unsustainable in law.

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