Section 263 revision fails where 80G deduction on CSR-linked contributions was examined under settled precedent.

An assessment allowing deduction under section 80G for CSR-linked contributions was challenged as erroneous and prejudicial under section 263. The ITAT Delhi noted that coordinate bench precedent had already considered whether such an allowance can justify revision, and applied that settled line of authority. It held that where the assessment has examined the claim in light of existing precedent, the order cannot be treated as erroneous or prejudicial merely because the revisionary authority prefers a different view on deductibility. The revisionary order was therefore quashed.

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Issues: Whether the revisionary order under section 263 could be sustained on the ground that the assessment order wrongly allowed deduction under section 80G in respect of corporate social responsibility contributions.

Analysis: The Tribunal noted that the question whether an assessment order allowing deduction under section 80G for CSR-linked contributions can be treated as erroneous and prejudicial to the interests of the Revenue had already been considered in several coordinate bench decisions. Relying on that line of authority, it held that where the claim is examined in the light of settled precedent, the assessment order cannot be branded as erroneous or prejudicial merely because the revisionary authority takes a different view on the allowability of the deduction.

Conclusion: The revision under section 263 was not sustainable and was quashed; the appeal was allowed in favour of the assessee.

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