Section 263 revision cannot replace a plausible assessment view; CSR-linked donations may still qualify for section 80G relief.

Section 263 revision was held unsustainable where the Assessing Officer had raised specific queries on the Chapter VI-A claim, examined the supporting material, and adopted a plausible view after enquiry. A revisional order cannot stand merely because another view is possible; it must be both erroneous and prejudicial to the interests of the Revenue. On the substantive issue, CSR-related donations were treated as deductible under section 80G where the statutory conditions of that provision are met, and the disallowance of CSR expenditure as business expenditure under Explanation 2 to section 37(1) does not by itself bar a separate Chapter VI-A claim.

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Issues: Whether the Principal Commissioner was justified in invoking revisionary jurisdiction under section 263 of the Income-tax Act, 1961 to revise the assessment order allowing deduction under section 80G in respect of CSR expenditure.

Analysis: The assessment records showed that the Assessing Officer had raised specific queries on the Chapter VI-A claim, examined the supporting details and evidence, and then allowed the deduction. For exercise of revisional power, the order must be both erroneous and prejudicial to the interests of the Revenue. A mere difference of opinion, or the fact that another view is possible, does not satisfy that test when the Assessing Officer has adopted a permissible and plausible view after enquiry. On merits, the deduction under section 80G for CSR-linked donations was held to be allowable where the statutory conditions of section 80G are otherwise satisfied. The disallowance of CSR expenditure as business expenditure under Explanation 2 to section 37(1) does not bar a separate claim under Chapter VI-A.

Conclusion: The invocation of section 263 was not justified and the revision orders were unsustainable.

Ratio Decidendi: Section 263 cannot be invoked where the Assessing Officer has taken a plausible view after enquiry, and CSR-related donations remain eligible for deduction under section 80G if the conditions of that provision are satisfied notwithstanding the disallowance regime under section 37(1).

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