Section 263 revision requires both error and prejudice to Revenue; mere lack of further enquiry is insufficient.

Revisionary jurisdiction under section 263 requires the Commissioner to identify both an error in the assessment order and real prejudice to the Revenue. Where the assessee's accounts were audited, quantitative details were on record, and the stock valuation method was disclosed in the audit material, revision could not rest merely on a view that the Assessing Officer should have made further enquiry. The absence of a detailed assessment order, by itself, was insufficient when relevant material was already available and no specific adverse material showing prejudice was identified. The section 263 revision was therefore not justified and the order setting aside the assessment was without jurisdiction.

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Issues: Whether the Commissioner was justified in invoking revisionary jurisdiction under section 263 to set aside the assessment on the ground that the Assessing Officer had failed to make proper enquiries regarding the fall in income and the method of valuation of closing stock, and whether the assessment order was erroneous and prejudicial to the interests of the Revenue.

Analysis: The material on record showed that the assessee's accounts were audited, quantitative details were available, and the method of valuing stock at market price was reflected in the audit records. The assessment order also recorded that the accounts had been examined and the return was accepted on the basis of the material available. The Commissioner did not point out any specific material demonstrating prejudice to the Revenue, and the revision was founded essentially on a view that further enquiry ought to have been made. For exercise of power under section 263, it was necessary to show both error in the assessment order and prejudice to the Revenue. A cryptic order does not by itself justify revision where relevant material was already on record and no specific adverse material was identified.

Conclusion: The invocation of section 263 was not justified, and the order setting aside the assessment was without jurisdiction.

Ratio Decidendi: Revision under section 263 cannot be sustained unless the Commissioner identifies both an error in the assessment order and real prejudice to the interests of the Revenue; a mere failure to write an elaborate assessment order or to make further enquiry, without more, is insufficient where relevant material is already on record.

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