Revisional jurisdiction requires identification of specific errors; absent that, revisional order quashed and assessment restored.

Revisional review under the tax code was challenged on whether the assessing officer conducted requisite enquiries and verifications before accepting nil long term capital gains computed under the prescribed computation method. The revisional authority made a conclusory finding of failure to verify without identifying specific errors or demonstrating that the assessment was erroneous and prejudicial to revenue; it also did not show consideration of submitted annexures and reconciliations. For lack of identified error and absence of demonstration that conditions for revisional jurisdiction were met, the revisional order was set aside and the original assessment restored.

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Issues: Whether the revisional order passed under Section 263 of the Income-tax Act, 1961 setting aside the assessing officer's order dated 26/09/2022 in respect of long term capital gains computed under Section 55(2)(ac) of the Income-tax Act, 1961 was valid, having regard to whether the assessing officer had made necessary enquiries and verifications such that the assessment order was not erroneous or prejudicial to the interests of the revenue.

Analysis: The assessing officer issued notices under Section 142(1) and sought scriptwise/datewise details and reconciliation statements; the assessee furnished detailed replies, annexures including reconciliation and capital gain workings, and copies of capital gain statements from mutual funds. The assessing officer again sought explanation and supporting evidence and the assessee replied, relying on the computation under Section 55(2)(ac). The assessing officer, after considering the submissions and documents, accepted the Nil long term capital gain. The revisional authority recorded a conclusory allegation that the assessing officer failed to make enquiries or verify the issue but did not identify specific errors in the assessment order or refer to particular omissions; the revisional order did not demonstrate consideration of the annexures and the replies furnished to the show cause notice. Absent specific instances of error or a demonstration that the assessment order was erroneous and prejudicial to revenue, the conditions for exercise of revisional jurisdiction under Section 263 and Explanation 2 to Section 263(1) were not satisfied.

Conclusion: The revisional order under Section 263 is set aside and the assessing officer's order dated 26/09/2022 is restored. The appeal is allowed in favour of the assessee.

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