Section 263 revision limited where assessment is not shown erroneous or prejudicial to revenue interests.

Section 263 revision cannot be invoked merely to substitute one view for another. Where the assessee had produced purchase and sales details, audited books of account and quantity particulars, and the revenue failed to show any discrepancy in the material relied on, the assessment order was not established to be erroneous and prejudicial to the interests of the revenue. On those facts, the revisional assumption of jurisdiction was invalid and no substantial question of law arose.

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Issues: Whether the Principal Commissioner could validly invoke revisionary jurisdiction under section 263 of the Income-tax Act, 1961 in the facts of the case.

Analysis: The Tribunal had examined the scope of section 263 and applied the settled principle that the revisional power cannot be used to substitute one view for another. It also recorded factual findings that the assessee had produced purchase and sales details, audited books of account, quantity particulars, and that no discrepancy was shown in the material relied upon by the revenue. On these facts, the Tribunal held that the assessment order was not shown to be erroneous and prejudicial to the interests of the revenue so as to justify revision.

Conclusion: The assumption of jurisdiction under section 263 was invalid, and the revenue's appeal did not raise any substantial question of law.

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