Revisionary jurisdiction requires a specific erroneous and prejudicial assessment, not merely further verification after scrutiny enquiries.

Revisionary jurisdiction under section 263 requires both an erroneous assessment order and prejudice to Revenue. Where the Assessing Officer raised specific scrutiny queries, received complete particulars and accepted the claims, the absence of detailed discussion in the assessment order does not establish lack of enquiry. A view that the enquiry was inadequate, or a different view taken by the Principal Commissioner, is insufficient without identification of a specific error. A revisionary direction for further verification alone therefore cannot sustain revision, particularly where the claims were accepted as legally sustainable in earlier years.

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Issues: Whether revisionary jurisdiction under section 263 could be exercised where the Assessing Officer had enquired into and allowed the assessee's claims.

Analysis: The assessment record showed that specific queries were raised under scrutiny proceedings and that complete particulars were furnished in respect of the claims subsequently questioned in revision. The absence of detailed discussion in the assessment order did not establish lack of enquiry. Revision requires the conjunctive existence of an erroneous assessment order and prejudice to Revenue; inadequate enquiry or a different view of the Principal Commissioner is insufficient. The claims had also been accepted as legally sustainable in the assessee's own earlier cases, and the revisionary order merely directed verification without recording a specific error in the assessment.

Conclusion: The conditions for invoking section 263 were not satisfied; the revisionary order was unsustainable and was set aside in favour of the assessee.

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