Section 263 revision cannot replace a plausible assessment view when inquiries were made and material was examined.

Revision under section 263 of the Income-tax Act is not justified merely because the Principal Commissioner believes further inquiry was possible. Where the Assessing Officer issued detailed notices, examined seized material, considered the assessee's replies, and completed the assessment after approval under section 153D, the assessment reflects inquiry and supervisory scrutiny. In such circumstances, a revisional authority cannot replace a plausible view taken on the record with its own opinion or direct a fresh assessment on vague allegations. The revision order is therefore unsustainable.

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Issues: Whether the Principal Commissioner was justified in invoking revisionary jurisdiction under section 263 of the Income-tax Act, 1961 to set aside the assessment, when the Assessing Officer had issued detailed notices, examined the seized material, considered the assessee's replies, and completed the assessment after obtaining approval under section 153D.

Analysis: The assessment records showed repeated inquiry by the Assessing Officer through notices under section 142(1) and consideration of the seized material before accepting the returned income. The assessment order was also passed with prior approval under section 153D, indicating supervisory examination of the record. Revision under section 263 cannot be sustained merely because the Principal Commissioner considers that further or deeper inquiry should have been made, unless a clear finding is recorded that the assessment order is erroneous and prejudicial to the interests of the revenue. Where the Assessing Officer has taken a plausible view after inquiry, the revisional authority cannot substitute its own opinion or direct a fresh assessment on vague allegations.

Conclusion: The invocation of section 263 was not justified and the revision order was unsustainable; the assessee succeeded.

Ratio Decidendi: Section 263 cannot be invoked merely on a general perception that further inquiry was possible when the assessment was made after inquiry and a plausible view was taken on the material available.

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