Section 263 revision barred when assessment followed due enquiry and the Assessing Officer adopted a plausible view on section 54B deduction.

Revision under section 263 of the Income-tax Act is unavailable where the Assessing Officer made due enquiry into a section 54B deduction claim, obtained replies and supporting documents, and adopted a plausible view in assessment under section 143(3). Section 263 requires the order to be both erroneous and prejudicial to the Revenue, and the Commissioner cannot revise merely because another view is possible or because the assessment order does not record every step of reasoning. On these facts, the conditions for revision were not met and the revision order could not be sustained.

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Issues: Whether the Principal Commissioner could invoke revisionary jurisdiction under section 263 of the Income-tax Act, 1961 where the Assessing Officer had made enquiries on the claim of deduction under section 54B and had taken one of the plausible views.

Analysis: The assessment record showed that the Assessing Officer had issued multiple notices calling for details relating to the sale of land, agricultural activity, crop details, supporting records, and the claim under section 54B, and the assessee had furnished replies and documentary material in response. On that basis, the assessment was framed under section 143(3) after enquiry. The revisionary power under section 263 can be exercised only when the order is both erroneous and prejudicial to the interests of the Revenue. Where the Assessing Officer has made due enquiry and adopted a reasonable view, the Commissioner cannot revise the order merely because a different view is possible or because the assessment order does not expressly narrate every step of reasoning.

Conclusion: The conditions for exercise of jurisdiction under section 263 were not satisfied. The revision order could not be sustained and the assessee succeeded.

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