Section 263 revision requires independent satisfaction by the Principal Commissioner; a proposal from another authority is not enough.

Revisionary jurisdiction under section 263 vests exclusively in the Principal Commissioner or Commissioner and must be exercised on that authority's independent examination of the assessment record. Where the proceeding was initiated on a proposal from the Additional Commissioner rather than suo motu satisfaction by the Principal Commissioner, the assumption of jurisdiction lacked statutory sanction and constituted a jurisdictional defect. The revision order was therefore set aside.

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Issues: Whether revisionary jurisdiction under section 263 of the Income-tax Act, 1961 could be validly invoked by the Principal Commissioner on the basis of a proposal sent by the Additional Commissioner, instead of the Principal Commissioner acting suo motu.

Analysis: The revisionary power under section 263 vests exclusively in the Principal Commissioner or Commissioner and must be exercised on the authority's own examination of the assessment record. Invocation of that jurisdiction on the basis of a proposal from another income-tax authority lacks statutory sanction and amounts to a jurisdictional defect. On the facts, the impugned revision was initiated on the proposal sent by the Additional Commissioner and not on the Principal Commissioner's independent satisfaction after calling for and examining the record.

Conclusion: The invocation of section 263 was invalid and the revision order was set aside.

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