Revision under section 263 fails where assessment followed enquiry and the Assessing Officer adopted a possible view.

Revisional jurisdiction under section 263 was held unavailable where the Assessing Officer had conducted enquiries, examined the assessee's books and statements, and completed the assessment under section 143(3) on one of the possible views of the material. The ITAT found that revision cannot be based merely on a different possible view when the assessment is neither shown to be erroneous nor prejudicial to the interests of the Revenue. On that footing, the revisional order was set aside in favour of the assessee.

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Issues: Whether the revisional order under section 263 of the Income-tax Act, 1961 was sustainable when the assessment had been completed after enquiry and the Assessing Officer had adopted one of the possible views.

Analysis: The assessee's return was selected for complete scrutiny, notices were issued, and the assessee furnished computation, balance-sheet, profit and loss account, cash-flow statement, cash book, confirmations and bank statements. The assessment was completed under section 143(3) after verification of the material placed on record. In such circumstances, where the Assessing Officer had made enquiries and taken a possible view, the revisional authority could not invoke section 263 merely because a different view on the same material was possible. The principle was reinforced by the cited Supreme Court decision.

Conclusion: The revisional order under section 263 was not sustainable and was set aside in favour of the assessee.

Ratio Decidendi: Section 263 cannot be invoked where the Assessing Officer has made enquiries and adopted one of the possible views on the material before him; revision is justified only when the assessment order is both erroneous and prejudicial to the interests of the Revenue.

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