Section 263 revision requires more than disagreement with reassessment conclusions where inquiry and verification were already made.

Revision under Section 263 of the Income-tax Act was not sustainable where the reassessment proceedings under Sections 148 and 143(3) had already examined the bank account issue and the claim under Section 10AA. The record showed that inquiry and verification were in fact made, so the Revenue's grievance was only with the conclusion reached in reassessment, not with any absence of inquiry. In that situation, Section 263 could be invoked only if the reassessment order was shown to be both erroneous and prejudicial to the interests of the Revenue on merits, and not as a mere substitution of opinion.

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Issues: Whether the Commissioner could invoke revisionary jurisdiction under Section 263 of the Income-tax Act, 1961 on the ground of lack of inquiry and verification in reassessment proceedings.

Analysis: The reassessment under Section 148 read with Section 143(3) of the Income-tax Act, 1961 had already considered the reasons relating to the bank account and the claim under Section 10AA of the Income-tax Act, 1961. The record indicated that inquiry and verification were in fact made in relation to the bank account, and the grievance was at best about the conclusion reached in reassessment, not absence of inquiry. In such a situation, exercise of Section 263 jurisdiction required a finding that the reassessment order was both erroneous and prejudicial to the interests of the Revenue on merits, and not merely a substitution of opinion.

Conclusion: The revisionary interference was not justified on the pleaded basis of no inquiry and verification, and the dismissal of the Revenue's appeal was upheld.

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