Limited scrutiny assessment cannot be expanded through revision under section 263 when the revised issues fall outside the scrutiny scope.

Revisional jurisdiction under section 263 cannot be used to widen a limited scrutiny assessment beyond the specific issues on which it was selected. Where the Assessing Officer confines the assessment to the allotted scrutiny parameters, revision cannot be sustained merely because other matters outside that scope were not examined, as those omissions do not by themselves make the assessment erroneous and prejudicial to the interests of the Revenue. On that reasoning, the revisional order was quashed and the assessment order restored in favour of the assessee.

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Issues: Whether the revisional order under section 263 could be sustained when the assessment was made in limited scrutiny and the matters forming the basis of revision were outside the scope of that scrutiny.

Analysis: The assessment had been selected for limited scrutiny on specified issues, and the Assessing Officer had worked within that confined scope. The grounds on which revision was attempted related to issues not forming part of the limited scrutiny parameters. In such a situation, the assessment could not be treated as erroneous and prejudicial to the interests of the Revenue merely because those extra-scrutiny issues were not examined. The revisional jurisdiction could not be invoked to expand the scope of a limited scrutiny assessment beyond the parameters fixed for it.

Conclusion: The revisional order was unsustainable and was quashed. The assessment order was restored, in favour of the assessee.

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