Section 263 revision fails where enquiry was made and only inadequate enquiry is alleged, not total lack of enquiry.

Revisional jurisdiction under section 263 can be exercised only where the assessment order is both erroneous and prejudicial to the Revenue. Where the Assessing Officer issued specific queries under section 142(1), the assessee replied with supporting documents, and the assessment was completed under section 143(3), the matter is one of enquiry having been made. Mere absence of elaborate reasoning in the assessment order, or the revisional authority's view that further enquiry was desirable, does not make the order erroneous. The distinction between lack of enquiry and inadequate enquiry is decisive: only a total lack of enquiry can justify revision. On that basis, the revisional order was unsustainable and the assessment was restored.

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Issues: Whether the revisional order under section 263 was sustainable when the assessment record showed enquiries by the Assessing Officer and the assessee had furnished replies and documents supporting the deduction under section 80IA.

Analysis: The jurisdiction under section 263 can be exercised only if the assessment order is both erroneous and prejudicial to the interests of the Revenue. Where the Assessing Officer has raised specific queries through notices under section 142(1), the assessee has responded with details and supporting material, and the assessment is framed under section 143(3), the case is one of enquiry having been made. In such a situation, merely because the assessment order does not record elaborate reasons, or the revisional authority believes that more enquiry ought to have been made, the order does not become erroneous. The distinction between lack of inquiry and inadequate inquiry is material: revision is permissible only in the former case, not in the latter. The Tribunal also noticed that on identical facts in the preceding year, the revisional order had already been set aside, and Explanation 2 to section 263 was held inapplicable because enquiries had in fact been conducted.

Conclusion: The revisional order was unsustainable and was set aside; the assessment order was restored in favour of the assessee.

Ratio Decidendi: Revisional jurisdiction under section 263 cannot be invoked where the Assessing Officer has made enquiries and adopted one of the possible views; inadequate enquiry is not enough, and only a total lack of enquiry can justify revision.

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