Revisional jurisdiction under s.263 invalid where Assessing Officer conducted enquiry and took a plausible view; delay condoned.

Delay of 2564 days in filing the appeal was condoned after finding bona fide and reasonable causes (prior remedies pursued, counsel's death, Covid limitation extension), and the appeal admitted. On the substantive point, revisional jurisdiction under section 263 may be invoked only if the assessing officer's order is shown to be erroneous (for lack of any enquiry, wrong application of law or facts, or breach of natural justice) and prejudicial to revenue; where documentary records show enquiries, notices, replies and supervisory approval and the AO adopted a plausible view, the revisional action is without jurisdiction and is set aside, restoring the original assessment.

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Issues: (i) Whether delay of 2564 days in filing the appeal to the Tribunal should be condoned; (ii) Whether the Principal Commissioner of Income Tax validly exercised revisional jurisdiction under section 263 of the Income-tax Act, 1961 in setting aside the assessment order.

Issue (i): Condonation of delay of 2564 days in filing the appeal before the Tribunal.

Analysis: The Tribunal examined the factual matrix including prior pursuit of remedy before appellate authorities, reliance on advice of previous counsel, demise of that counsel, and the period of limitation extension related to the Covid-19 limitation orders. The Tribunal applied established principles that every day of delay must be explained and that bona fide and reasonable causes justify a liberal approach to condonation where substantial justice would otherwise be defeated.

Conclusion: The delay is condoned and the appeal is admitted for adjudication.

Issue (ii): Validity of exercise of revisional jurisdiction under section 263 of the Income-tax Act, 1961 to set aside the assessment order.

Analysis: The Tribunal analysed the scope of section 263, applying the twin conditions that (i) the Assessing Officer's order must be erroneous (by incorrect facts, incorrect law, lack of application of mind, violation of natural justice, or no inquiry) and (ii) the erroneous order must be prejudicial to the revenue. The Tribunal evaluated whether the AO had conducted any enquiry or had merely taken one of the permissible views. Drawing on precedents distinguishing lack of inquiry from inadequate inquiry, the Tribunal found documentary evidence of enquiries, notices issued, replies furnished, and approval by the Joint Commissioner under section 153D. The Tribunal concluded that the AO had carried out inquiry and taken a plausible view and that the Principal Commissioner could not treat an adequate inquiry as absence of inquiry simply because he preferred a different view. Consequently, the Principal Commissioner's invocation of section 263 was without jurisdiction.

Conclusion: The impugned order under section 263 is set aside and the original assessment order is restored; the revisional action is without jurisdiction and is therefore quashed.

Final Conclusion: The Tribunal condoned the delay in filing the appeal and, on the merits, allowed the appeal by setting aside the revision under section 263 and restoring the assessment order, thereby deciding the substantive dispute in favour of the assessee.

Ratio Decidendi: A revisional order under section 263 of the Income-tax Act, 1961 can be validly exercised only when the Assessing Officer's order is shown to be erroneous for reasons such as absence of any enquiry or wrong application of law or facts and such error is prejudicial to revenue; an assessment made after enquiry and resulting in a plausible view does not become erroneous merely because the Commissioner prefers an alternative view.

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