Section 263 revision fails where the Assessing Officer made enquiries and adopted a plausible view on section 54B relief.

Section 263 revision cannot be sustained where the Assessing Officer made enquiries on the land transaction and the section 54B claim, obtained replies and supporting documents, and adopted a plausible view on the facts. The record showed notices on the sale deed, purchase deed, agricultural operations, crop details, agricultural expenses, and the basis of exemption, so the assessment was not one made without enquiry. The revisionary authority could not replace that view merely because a deeper enquiry was considered desirable. As the twin requirements of error and prejudice to the revenue were not established, the principal commissioner's revisionary order was set aside and the original assessment restored.

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Issues: Whether revision under section 263 was valid on the ground of alleged lack of enquiry by the Assessing Officer regarding the nature of the land transaction and eligibility for deduction under section 54B.

Analysis: The assessment record showed that the Assessing Officer had issued several notices and had sought details regarding the sale deed, purchase deed, agricultural operations, crop details, agricultural expenses, and the basis for the claim under section 54B. The assessee furnished replies and supporting material. On these facts, the assessment order could not be treated as one passed without enquiry. The revisionary authority could not substitute its own view merely because it considered further or deeper enquiry desirable. The record also indicated that the Assessing Officer had adopted a plausible view on the character of the transaction and the claim under section 54B. In such circumstances, the twin requirements for revision, namely error and prejudice to the revenue, were not established. The co-owner treatment on the same composite transaction further supported the view that the assessment could not be selectively disturbed on identical facts.

Conclusion: The revision under section 263 was not sustainable and the order of the Principal Commissioner was set aside.

Final Conclusion: The assessee succeeded in challenging the revisionary order, and the assessment as originally framed was restored.

Ratio Decidendi: Where the Assessing Officer makes enquiries on a disputed issue and adopts one of two plausible views, the revisionary power under section 263 cannot be invoked unless the order is both erroneous and prejudicial to the revenue.

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