Limited scrutiny limits revision under section 263 where proposed issues fall outside the permitted scope of inquiry.

In a limited scrutiny assessment confined to a Chapter VIA deduction claim, the Assessing Officer examined the relevant donation details and completed the assessment under section 143(3). Revisional action under section 263 could not be sustained on issues outside that restricted scope, including an alleged salary mismatch and proposed disallowance under section 14A read with Rule 8D, because the scrutiny had not been validly expanded. Revisional interference requires the assessment to be erroneous and prejudicial within the lawful scope of inquiry; matters beyond the specified scrutiny mandate cannot be used to direct fresh examination. The revision order was therefore quashed.

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Issues: Whether the revision order under section 263 of the Income-tax Act, 1961, could be sustained when the assessment had been completed in a limited scrutiny proceeding confined to the deduction claim under Chapter VIA.

Analysis: The assessment was selected for limited scrutiny only to verify the deduction claim under Chapter VIA, and the Assessing Officer had called for and examined the relevant donation details before completing the assessment under section 143(3). The revisionary authority sought to reopen the matter on aspects concerning alleged mismatch in salary income and the need for disallowance under section 14A read with Rule 8D, both of which were outside the stated scope of the limited scrutiny. In such a situation, the Assessing Officer could not travel beyond the issues for which scrutiny had been restricted unless the prescribed enlargement of scrutiny was obtained. Since the revision was founded on matters outside that limited mandate, the conditions for revisional interference were not satisfied.

Conclusion: The revision order under section 263 was not sustainable and was quashed, in favour of the assessee.

Ratio Decidendi: In a limited scrutiny assessment, revisional jurisdiction cannot be exercised to direct inquiry or fresh assessment on issues beyond the specified scope of scrutiny unless the scrutiny is validly expanded in accordance with law.

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