Section 263 revision upheld for failure to verify mismatch between book receipts and Form 26AS disclosures.

Revision under section 263 of the Income-tax Act was held justified because the Assessing Officer did not verify a material mismatch between gross receipts shown in the books and those reflected in Form 26AS. Although queries were raised on TDS credit, reconciliation and work contracts, there was no specific enquiry or application of mind on the receipt discrepancy. An assessment order passed without enquiry on a material issue is erroneous and prejudicial to the interests of the revenue, so the Commissioner's revisional action was sustained and the assessee's challenge failed.

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Issues: Whether revision under section 263 of the Income-tax Act, 1961 was justified where the Assessing Officer had not verified the mismatch between gross receipts shown in the books and the gross receipts reflected in Form 26AS.

Analysis: The assessment record showed that the Assessing Officer had sought details regarding TDS credit, reconciliation and work contracts, and the assessee had replied to those queries. However, there was no specific enquiry or verification by the Assessing Officer on the mismatch between the gross receipts disclosed in the books and the gross receipts reflected in Form 26AS. An order passed without enquiry on a material issue is erroneous and prejudicial to the interests of the revenue. Since the Commissioner found this omission, the preconditions for revision were satisfied.

Conclusion: Revision under section 263 was held to be valid and the assessee's challenge failed.

Final Conclusion: The revisional order was sustained and the assessee's appeal did not succeed.

Ratio Decidendi: An assessment order is liable to revision under section 263 when a material issue remains unverified and the order is passed without the necessary enquiry or application of mind.

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