Revisionary jurisdiction fails where cash deposits were examined in assessment and the AO took a permissible view.

Revisionary jurisdiction under section 263 was unsustainable where the AO had examined the cash deposits, considered the assessee's explanation and, on the facts, consciously chose not to make an addition under section 68 read with section 115BBE. The Tribunal held that the assessment was completed after enquiry and that the Commissioner failed to show the order was erroneous or prejudicial to the Revenue. As the AO's view was a permissible one on the record, the section 263 order was quashed.

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Issues: Whether the revisionary order under section 263 of the Income-tax Act, 1961 was valid where the Assessing Officer had examined the cash deposits, accepted the assessee's explanation on the facts, and did not invoke section 68 read with section 115BBE of the Income-tax Act, 1961.

Analysis: The assessee was engaged in educational ies and had claimed exemption under section 10(23C)(iiiab) of the Income-tax Act, 1961. The assessment had been completed after enquiry, and the addition relating to cash deposits arose because certain student-fee details were initially not produced. The assessee later placed material to explain the receipts. The Tribunal found that on the record the Assessing Officer had applied his mind and had taken a conscious view not to make an addition under section 68 read with section 115BBE. It further found that the Commissioner had not shown that the assessment order was either erroneous or prejudicial to the interests of the Revenue, and that the view taken by the Assessing Officer was a permissible one on the facts.

Conclusion: The assumption of revisional jurisdiction under section 263 was unsustainable and the order passed under section 263 was quashed. The assessee succeeded.

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