Section 263 revision fails where enquiry was made and the Assessing Officer adopted a plausible view on the disputed claims.

Section 263 revision is unsustainable where the Assessing Officer made detailed enquiries, examined supporting evidence and adopted a plausible view on the claims. The Principal Commissioner cannot revise the assessment merely because he prefers a different view or seeks fresh adjudication without showing that the order is both erroneous and prejudicial to the Revenue. On the disputed items, the analysis notes that the claims were supported by settled principles relating to provision for doubtful debts, section 80M, business expenditure, statutory payments, GST credit reversal loss and section 54EC exemption. The revisionary order was quashed and the assessment under section 143(3) read with section 144B remained undisturbed.

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Issues: Whether the revisionary order passed under section 263 of the Income-tax Act, 1961 was sustainable where the assessment had been completed under section 143(3) read with section 144B and the Principal Commissioner directed disallowance/addition on several issues, including provision for doubtful debts, dividend from a specified foreign company, festival and pooja expenses, taxes paid under protest, GST credit reversal loss, and exemption under section 54EC.

Analysis: The statutory power under section 263 can be exercised only when the assessment order is both erroneous and prejudicial to the interests of the Revenue. The record showed that the Assessing Officer had raised detailed queries, obtained exhaustive replies and supporting evidence, and adopted one of the permissible views on the examined issues. The Principal Commissioner did not demonstrate a lack of enquiry so much as a disagreement with the view taken by the Assessing Officer. The assessment could not be revised merely because the Principal Commissioner preferred a different view or sought to substitute his directions for a fresh adjudication on the merits of the claim. On the disputed items, the assessee had also shown that the claims were supported by settled principles, including deduction for provision for doubtful debts on actual write-off treatment, deduction under section 80M at gross total income stage, allowability of business expenditure under section 37(1), deduction of statutory payments under section 43B, admissibility of GST credit reversal loss on the facts, and exemption under section 54EC in relation to depreciable assets.

Conclusion: The conditions precedent for invoking section 263 were not satisfied, and the revisionary order was unsustainable in law.

Final Conclusion: The impugned revision was quashed, and the assessment framed under section 143(3) read with section 144B was left undisturbed.

Ratio Decidendi: Revision under section 263 cannot rest on a mere difference of opinion where the Assessing Officer has made enquiries and adopted a plausible view; the Commissioner must establish both error and prejudice before setting aside the assessment.

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