Section 263 revision fails where due enquiry exists; urban land tax, provident fund damages, and bad debt claims were allowed.

Revisional jurisdiction under section 263 is not sustainable where the assessment records show that the Assessing Officer made due enquiry, examined the relevant claims, and the order is neither erroneous nor prejudicial to the revenue. The text also notes that expired time limits for fresh assessments support finality where no stay extends limitation. On deductions, urban land tax was treated as allowable on accrual, damages for delayed provident fund payment were treated as compensatory rather than penal, and bad debts written off after rehabilitation were accepted when supported by enquiry. The original assessments were therefore left undisturbed.

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Issues: (i) Whether the Commissioner's revisional order under section 263 was valid when the Assessing Officer had already examined the relevant claims and the period for making fresh assessments had expired. (ii) Whether the deductions for urban land tax, damages for delayed provident fund payment, and bad debts were rightly allowed in the original assessments.

Issue (i): Whether the Commissioner's revisional order under section 263 was valid when the Assessing Officer had already examined the relevant claims and the period for making fresh assessments had expired.

Analysis: The assessment records showed that the Assessing Officer had raised queries, received explanations and details from the assessee, and considered them before completing the assessments. The revisional power could not be exercised on the footing that there had been no verification when the record disclosed due enquiry. The limitation point also supported the assessee, as the time prescribed for fresh assessments had run out and the order under section 263 had not been stayed so as to extend time.

Conclusion: The revisional order was without jurisdiction and could not be sustained.

Issue (ii): Whether the deductions for urban land tax, damages for delayed provident fund payment, and bad debts were rightly allowed in the original assessments.

Analysis: The urban land tax liability had arisen on demand during the relevant previous year and was allowable on accrual. The damages for delayed provident fund payment were compensatory in character, not penal, and were incurred in circumstances beyond the assessee's control. The bad debts had been written off by the Board after the company had entered rehabilitation, and the write-off was accepted after enquiry by the Assessing Officer.

Conclusion: The original allowances of all three claims were correct.

Final Conclusion: The revisional orders were annulled and the assessments as originally made were left undisturbed.

Ratio Decidendi: Revisional jurisdiction cannot be invoked under section 263 where the assessment records show due enquiry and the assessment is neither erroneous nor prejudicial to the revenue; compensatory statutory charges and properly written-off bad debts may be allowed as deductions when supported by the facts and the assessment enquiry.

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