Section 263 revision cannot replace a supported assessment view absent error and prejudice to revenue.

Revisional jurisdiction under section 263 of the Income-tax Act cannot be invoked merely to replace one permissible view with another when the assessment is supported by relevant material. The Tribunal found that the assessee had furnished purchase and sales details, audited books, and quantity particulars, and that no discrepancy emerged between purchases and the fall in sales. Applying the settled test that an order must be both erroneous and prejudicial to the interests of the revenue, the court held that the Principal Commissioner's assumption of jurisdiction was unsustainable and that no substantial question of law arose for interference.

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Issues: Whether the Principal Commissioner could validly exercise revisional jurisdiction under section 263 of the Income-tax Act, 1961 on the facts found by the Tribunal.

Analysis: The Tribunal had recorded factual findings that the assessee furnished purchase and sales details, audited books of account, quantity particulars, and that no discrepancy emerged between the purchases shown and the fall in sales. It also applied the settled principle that section 263 does not permit substitution of one view for another and relied on the governing test of an order being both erroneous and prejudicial to the interests of the revenue.

Conclusion: The assumption of jurisdiction under section 263 was held to be unsustainable, and no substantial question of law arose for interference.

Ratio Decidendi: Revisional jurisdiction under section 263 cannot be exercised merely to substitute one opinion for another where the assessing authority's view is supported by relevant material and the order is not shown to be erroneous and prejudicial to the interests of the revenue.

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