Debatable 80G deduction on CSR expenditure cannot justify revisionary jurisdiction under section 263.

Revision under section 263 was considered in relation to an assessee's claim for deduction under section 80G on CSR expenditure. The Tribunal noted that the allowability of such deduction was a highly debatable issue and had been supported by consistent Tribunal decisions, so it could not be treated as an erroneous and prejudicial assessment for revisional purposes. The absence of a specific enquiry by the Assessing Officer did not justify revision where the claim was legally tenable and further verification would serve no useful purpose. On that basis, the revisional jurisdiction under section 263 was held unsustainable and the revisionary order was set aside.

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Issues: Whether revision under section 263 could be sustained on the ground that the assessee's claim of deduction under section 80G in respect of CSR expenditure made the assessment order erroneous and prejudicial to the interests of the Revenue.

Analysis: The claim related to deduction under section 80G on CSR expenditure, and the issue was found to be highly debatable in view of consistent Tribunal decisions taking the view that such expenditure could be considered for deduction. It was held that a debatable issue cannot form the basis for assumption of revisional jurisdiction under section 263. The absence of a specific enquiry by the Assessing Officer did not alter the position, because where the claim is legally tenable and the issue is already covered by judicial decisions, remanding the matter for verification would serve no useful purpose.

Conclusion: The assumption of jurisdiction under section 263 was unsustainable and the revisionary order was set aside in favour of the assessee.

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