Section 263 revision barred where the Assessing Officer adopted one of two plausible views on bogus purchase disallowance.

Section 263 cannot be invoked merely because the Principal Commissioner prefers a different plausible view on a debatable issue. The Assessing Officer had enquired into alleged bogus purchases and adopted one of two possible views by restricting the disallowance to 25% under section 69C, which was not shown to be unsustainable in law. As the revision sought to substitute that view with a 100% disallowance on the basis of other precedents, the assumption of revisionary jurisdiction was invalid and the order was quashed.

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Issues: Whether the revisionary order under section 263 was sustainable where the Assessing Officer, after enquiry, had taken one of two possible views on the extent of disallowance relating to alleged bogus purchases.

Analysis: The Assessing Officer had examined the purchases, treated them as bogus, and adopted a considered view to disallow 25% of the purchases under section 69C of the Income-tax Act, 1961. The Principal Commissioner substituted that view by directing disallowance of 100% on the basis of different precedents. The central question was whether such substitution was permissible when the matter was debatable and two views were reasonably possible. Applying the principle that section 263 cannot be invoked merely because the Commissioner prefers another view, and noting that the Assessing Officer's view was not unsustainable in law, the revision was held to be based on a debatable issue.

Conclusion: The revisionary assumption of jurisdiction under section 263 was not valid, and the order was quashed.

Ratio Decidendi: Section 263 cannot be used to revise an assessment merely because the Commissioner prefers a different plausible view on a debatable issue, so long as the Assessing Officer's view is not unsustainable in law.

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