Revision under section 263 upheld where the Assessing Officer failed to verify cash deposits and agricultural income claims.

An assessment order passed under section 143(3) without the required inquiry or verification on cash deposits and the claim of agricultural income was treated as erroneous and prejudicial to the interests of the Revenue. On that basis, revision under section 263 of the Income-tax Act, 1961 was held justified, and the assessee's challenge failed. The revisionary order directing fresh assessment was upheld.

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Issues: Whether revision under section 263 of the Income-tax Act, 1961 was justified on the ground that the Assessing Officer passed the assessment order without making inquiries or verification on the cash deposits and agricultural income.

Analysis: The assessment had been completed under section 143(3) of the Income-tax Act, 1961, but the record showed that the Assessing Officer had not made the inquiries or verification that were required on the issues of cash deposits and the claim of agricultural income. An assessment order passed without such necessary inquiry is erroneous in so far as it is prejudicial to the interests of the Revenue and falls within the scope of section 263.

Conclusion: The revisionary order under section 263 was upheld and the assessee's challenge failed.

Final Conclusion: The appeal was dismissed and the revision directing fresh assessment remained undisturbed.

Ratio Decidendi: An assessment order passed without making inquiries or verification that should have been made is erroneous and prejudicial to the interests of the Revenue, justifying revision under section 263 of the Income-tax Act, 1961.

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