Revision under section 263 fails where land acquisition compensation exemption was already examined and supported by documentary evidence.

Section 263 revision could not be invoked where the assessment record already showed a specific enquiry by the Assessing Officer into the exemption claim on compensation for compulsory acquisition of land, supported by the award, notice, bank statement and Form 26AS. The Commissioner's view that further enquiry was required on the applicability of Fourth Schedule enactments and CBDT instructions was not backed by material showing that the acquisition fell within those enactments, and the order did not sufficiently establish prejudice to the Revenue. The assessee's exemption claim under section 96 of the 2013 Act was therefore outside the scope of valid revision, and the revisionary order was unsustainable.

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Issues: Whether the Commissioner was justified in invoking revisionary jurisdiction under section 263 of the Income-tax Act, 1961 in respect of the assessee's claim of exemption on compensation received for compulsory acquisition of land under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Analysis: The assessment record showed that the Assessing Officer had already raised a specific query on the compensation received on compulsory acquisition, and the assessee had furnished the relevant award, notice, bank statement, and Form 26AS. The revisionary order proceeded on the footing that further enquiry ought to have been made regarding the applicability of the Fourth Schedule enactments and the CBDT instructions, but the material placed before the Commissioner did not establish that the acquisition was under any such enactment. The order under section 263 also did not sufficiently demonstrate how the assessment order was prejudicial to the interests of the Revenue. The compensation claim was supported by the acquisition documents and was consistent with the exemption claimed under section 96 of the 2013 Act.

Conclusion: The revisionary order under section 263 was not sustainable. The assessee's claim was held to be outside the scope of a valid revision, and the issue was decided in favour of the assessee.

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