Revisionary jurisdiction requires demonstrable assessment error and Revenue prejudice, not mere dissatisfaction with verification already undertaken in reassessment.

Revision under section 263 requires both an erroneous assessment order and prejudice to Revenue interests. Where reassessment was initiated to examine an alleged advance receipt, notices were issued, detailed replies and supporting material were considered, and the assessment order recorded the inquiry and explanation, further revision cannot rest merely on dissatisfaction with that inquiry. In the absence of any identified unexamined issue, defect in the material, or apparent error causing prejudice, the statutory conditions for revision were not met. The revision order was set aside and the reassessment order was restored.

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Issues: Whether revision of the reassessment order for alleged failure to verify the claimed receipt of Rs.75 lakh was valid under section 263.

Analysis: Revision under section 263 requires the coexistence of an erroneous assessment order and prejudice to the interests of the Revenue. The reassessment had been initiated specifically to examine the alleged advance receipt. Notices were issued, detailed replies and supporting material were furnished, and the assessment order recorded the inquiry and explanation concerning the transaction. The revisionary authority did not identify any specific unexamined aspect, defect in the material considered, or apparent error demonstrating prejudice; its direction for further verification amounted only to dissatisfaction with the inquiry already made.

Conclusion: The conditions for revision under section 263 were not fulfilled; the revision order was set aside and the reassessment order was restored, in favour of the assessee.

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