Law:

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Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interests of revenue - Assessment year 1993-94 - Whether jurisdiction under section 263 cannot be invoked for making short enquiries or to go into process of assessment again and again merely on basis that more enquiry ought to have been conducted to find something - Held, yes FACTS The ITO passed the assessment order for the assessment year 1993-94 under section 143(3). The Commissioner invoked jurisdiction under section 263 and cancelled the assessment order holding it to be erroneous and prejudicial to the interest of the revenue and directed the ITO to make a fresh assessment order after making inquiry. The Tribunal set aside the order of the Commissioner holding that since the Assessing Officer had passed assessment order after due application of mind and holding enquiries, there existed no material for exercise of power under section 263. On revenue's appeal : HELD It is true that in a given case not holding of any enquiry, which is relevant for assessment may indicate non-application of mind by the Assessing Officer or furnish the ground for taking action under section 263 by the Commissioner. [Para 9] From the record of the proceedings, in the instant case, no presumption could be drawn that the Assessing Officer had not applied his mind to the various aspects of the matter. In such circumstances, without evenprima facie laying foundation for holding that assessment order was erroneous and prejudicial to interest in any matter merely on the ground that the Assessing Officer was required to make an enquiry, could not be held to satisfy the test of existing necessary condition for invoking jurisdiction under section 263.[Para 10] Undoubtedly, the jurisdiction under section 263 is wide and is meant to ensure that due revenue ought to reach the public treasury and if it does not reach on account of some mistake of law or fact committed by the Assessing Officer, the Commissioner can cancel that order and require the concerned Assessing Officer to pass a fresh order in accordance with law after holding a detailed enquiry. But when enquiry in fact had been conducted and the Assessing…

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