The Assessing Officer completed the assessment after examining the tax audit report which disclosed payment of bonus to a director. The Principal Commissioner invoked section 263 on the ground that the payment was excessive and unreasonable. The Tribunal held that the Principal Commissioner failed to establish how the assessment order was both erroneous and prejudicial to the interests of the Revenue, which are mandatory preconditions for invoking section 263. The increased turnover and profits of the assessee, the Board’s approval of the bonus and the fact that the director had paid tax on the bonus at a higher rate than the company were ignored by the Principal Commissioner. Merely because another view was possible, the revisionary jurisdiction could not be exercised. Accordingly, the revision order was quashed. (AY. 2020-21)