Section 263 revision fails where the Assessing Officer made inquiries into demonetisation cash deposits and examined supporting records.

A revisional order under Section 263 of the Income-tax Act cannot be sustained where the Assessing Officer made enquiries into demonetisation-period cash deposits, issued notices, received replies, and examined supporting records such as bank certificates, bank statements, cash book and VAT returns. On those facts, the assessment was not a case of lack of inquiry; the Principal Commissioner's criticism concerned only the adequacy of the inquiry and amounted to a different opinion. Revision is permissible only when the assessment order is both erroneous and prejudicial to the interests of the Revenue, so the Tribunal was correct in quashing the revision.

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Issues: Whether the revisional order under Section 263 of the Income-tax Act, 1961 could be sustained when the Assessing Officer had conducted enquiries into cash deposits during the demonetization period and examined the supporting material before completing the assessment.

Analysis: The assessment was initiated specifically to verify cash deposits during the demonetization period. The record showed that notices were issued, replies were filed, and supporting documents such as bank certificates, bank statements, cash book and VAT returns were produced before the Assessing Officer. On these facts, the assessment could not be characterised as a case of no inquiry. The revisional authority's view that the Assessing Officer should have made further verification amounted only to a different opinion on the sufficiency of inquiry. In revision under Section 263, the Principal Commissioner cannot substitute his own view for that of the Assessing Officer unless the assessment order is shown to be both erroneous and prejudicial to the interests of the Revenue.

Conclusion: The revisional order was not sustainable. The Tribunal was in quashing the order under Section 263, and the challenge to that view failed.

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