Section 263 revision barred where reassessment was completed on the same issue and no extraneous matters could be added.

Revision under section 263 could not be sustained where the reassessment had already been completed on the very issue for which it was reopened. The revisional authority sought to rely on survey material and other discrepancies outside the scope of the reopening, but section 263 applies only if the assessment order is both erroneous and prejudicial to the interests of the Revenue. As the reassessment was confined to a specific recorded reason and the addition was made on that basis, the order could not be revised on extraneous matters. The revisional order was quashed and the assessee succeeded on the jurisdictional challenge.

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Issues: Whether revision under section 263 could be sustained where the reassessment had already been completed on the very issue for which the assessment was reopened, and whether the reassessment order could still be treated as erroneous and prejudicial to the interests of the Revenue.

Analysis: The reassessment had been initiated on a specific reason recorded under section 148A and completed by making the addition relatable to that reason. The revisional order under section 263 travelled beyond the scope of that reopening and sought to bring in survey material and other alleged discrepancies not forming part of the reassessment basis. The governing principle applied was that revisionary jurisdiction under section 263 can be exercised only when the order of the Assessing Officer is both erroneous and prejudicial to the interests of the Revenue, and that an order cannot be revised on issues outside the subject matter of the reassessment proceedings where the reopening itself was confined to a specific issue.

Conclusion: The conditions for exercise of jurisdiction under section 263 were not satisfied, and the revisional order was quashed in favour of the assessee.

Final Conclusion: The reassessment order was held immune from revision on the extraneous issues sought to be introduced, and the assessee succeeded on the core jurisdictional challenge while the remaining grounds were left open.

Ratio Decidendi: Where reassessment is completed on the very issue for which it was reopened, section 263 cannot be used to revise that order on unrelated matters beyond the scope of the reopening unless the reassessment order is shown to be both erroneous and prejudicial to the interests of the Revenue.

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