Section 263 revision fails where the Assessing Officer made proper enquiry and adopted a possible view on the assessee's transaction.

Revision under section 263 was held unsustainable where the Assessing Officer had raised specific scrutiny queries on the assessee trust's advance to a related person, the proposed property purchase, supporting documents, and compliance matters, and the assessee had replied with documents during assessment. On those facts, the assessment could not be treated as lacking enquiry. The revisional authority could not invoke section 263 merely because a different inference from the same material was possible; proper enquiry and adoption of a possible view by the Assessing Officer defeated the claim that the order was both erroneous and prejudicial to the interests of the Revenue. The revision was therefore quashed.

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Issues: Whether the revisionary order under section 263 of the Income-tax Act, 1961 could be sustained when the Assessing Officer had conducted enquiry into the assessee trust's advance to a related person and had taken a view on the material placed before him.

Analysis: The assessment record showed that specific queries were raised during scrutiny regarding the payment made to the trustee-related person, the proposed purchase of property, the supporting documents, and compliance requirements. The assessee furnished replies and documents in response to the notices issued during assessment proceedings. On these facts, the order could not be treated as one passed without enquiry. The revisional authority therefore lacked a valid to hold that the assessment order was both erroneous and prejudicial to the interests of the Revenue merely because a different view on the transaction was possible. The existence of enquiry and consideration by the Assessing Officer was sufficient to negate revision under section 263.

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

Final Conclusion: The assessment order was held to be a product of proper scrutiny and enquiry, so the revisional interference was set aside.

Ratio Decidendi: Where the Assessing Officer has made proper enquiries and taken a possible view on the material supplied by the assessee, the assessment order cannot be revised under section 263 merely because the Commissioner prefers a different inference.

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