Revision under section 263 fails where advance tax payment supports estimate compliance and omission to charge interest is not prejudicial.

Revision under section 263 was found unwarranted where the record showed the assessee had paid advance tax and the Income-tax Officer had noted its adjustment. Because no notice under section 210 had been issued, the payment could not be treated as made pursuant to a departmental demand, and the surrounding facts supported the inference that it was paid against an estimate under section 212(3). On that basis, the omission to charge interest under section 217 did not render the assessment erroneous or prejudicial to the interests of the Revenue, and the revisionary order was cancelled.

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Issues: Whether the Commissioner was justified in exercising revisionary jurisdiction under section 263 of the Income-tax Act, 1961 on the ground that interest under section 217 had not been charged, and whether the assessee had in fact complied with section 212(3) by filing an estimate and paying advance tax.

Analysis: The assessment record showed that the Income-tax Officer had himself noted adjustment of advance tax of Rs. 2,320 paid on 29 December 1973. No notice under section 210 had been issued for the relevant year, and the amount could therefore not be treated as payment pursuant to departmental demand. The surrounding circumstances supported the inference that the payment was made against an estimate under section 212(3), and the Commissioner's order under section 263 did not advert to this material fact. In these circumstances, the omission to charge interest under section 217 did not make the assessment order erroneous and prejudicial to the interests of the Revenue.

Conclusion: The revision under section 263 was not warranted, and the Commissioner's order was cancelled. The appeal succeeded in favour of the assessee.

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