Revision under Section 263 fails where assessment was made after inquiry and the Assessing Officer adopted a permissible view.

Where the Assessing Officer had raised queries, examined ledger extracts and business expenditure, and taken a permissible view on the material, revision under Section 263 could not be sustained merely because the revisional authority preferred a different interpretation. The Tribunal's finding that the assessment was made after enquiry and was not erroneous or perverse was upheld, and the Revenue's challenge failed. The decision affirms that revisional interference is unavailable absent lack of inquiry or demonstrable perversity in the assessment order.

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Issues: Whether the Tribunal was justified in setting aside the revisional order under Section 263 of the Income-tax Act, 1961 on the ground that the Assessing Officer had already made enquiries and two views were possible on the material before him.

Analysis: The assessment record showed that the Assessing Officer had raised queries regarding the expenses and had examined the relevant ledger extracts and business expenditure. The revisional authority's objections regarding cash salary payments, alleged non-deduction of tax at source, and business promotion expenses were found to have been considered in assessment proceedings. In such circumstances, the Tribunal held that the assessment order could not be treated as erroneous merely because the revisional authority preferred a different view. No perversity in the Tribunal's appreciation of facts was shown.

Conclusion: The Tribunal's view that the assessment order was not liable to revision under Section 263 was upheld, and the challenge by the Revenue failed.

Final Conclusion: The revisional interference was not sustained because the assessment had been made after enquiry and the competing view of the Assessing Officer could not be displaced in the absence of perversity.

Ratio Decidendi: Where the Assessing Officer has applied his mind and taken one permissible view on the material, revision under Section 263 cannot be sustained merely because the revisional authority prefers another view, absent perversity or lack of inquiry.

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