Section 263 revision fails where the AO made enquiry on the deduction claim and the record shows verification, not lack of enquiry.

Section 263 revision was unsustainable where the assessment record showed that the AO had called for employee-wise details, supporting documents and justification for the section 80JJAA claim, and the assessee had furnished the requisite particulars during scrutiny. A brief assessment order did not by itself establish lack of enquiry. The revisional authority also failed to identify any specific enquiry left unmade or any concrete error prejudicial to Revenue. On that basis, the Commissioner could not invoke section 263 merely to direct a fresh look at the deduction claim, and the revisionary interference was held unwarranted.

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Issues: Whether the revisionary order under section 263 of the Income-tax Act, 1961, disallowing the assessee's claim under section 80JJAA and directing a fresh assessment, was sustainable when the assessment record showed enquiries on the claim and the assessee had furnished supporting details during scrutiny.

Analysis: The assessment record showed that the Assessing Officer had issued a notice under section 142(1) calling for employee-wise details, documentary evidence, and justification for the deduction under section 80JJAA. The assessee furnished the required particulars, employee lists, pay slips, computation details, and Form 10DA, and explained the basis of the claim. The revisionary authority, however, proceeded on the premise that no relevant material had been furnished and that the deduction was not allowable because of business reorganisation. The record did not support a case of absence of enquiry. Once the Assessing Officer had called for information and examined the claim, the mere fact that the assessment order did not contain an elaborate discussion did not render it erroneous. The revisionary authority also did not identify any specific enquiry that remained unmade by the Assessing Officer.

Conclusion: The order under section 263 was not sustainable and the assessee's claim could not be disturbed on the ground of lack of enquiry.

Final Conclusion: The revisionary interference was unwarranted because the assessment was founded on enquiry and verification, and the Commissioner could not invoke section 263 merely to remand the matter for a second look.

Ratio Decidendi: Where the assessment record evidences enquiry into a claim, section 263 cannot be invoked merely because the assessment order is brief or does not discuss the issue in detail; the revisional authority must identify a specific lack of enquiry or error causing prejudice to the Revenue.

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