Judgment :- JAYASIMHA BABU, J. For the asst. yr. 1970-71, the following questions of law have been referred to us for our decision at the instance of the Revenue : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in setting aside the order passed by the CIT under s. 263 of the IT Act, 1961 ? 2. Whether the Tribunal was right in holding and had valid materials to hold that the order of the ITO was not erroneous and prejudicial to the interests of the Revenue ?" The CIT has for that assessment year initiated proceedings under s. 263 of the IT Act, 1961, as he felt that the order of assessment made by the ITO on 28th February, 1977, was prejudicial to the Revenue, inasmuch as the value of the construction put up by the assessee had been understated and the low valuation offered by the assessee, in the view of the CIT, had not been sufficiently revised having regard to the size of the construction and the rentals received from that construction. The assessee had reported that the construction put up was at a cost of Rs. 60, 600 and had also furnished valuation report from a valuer who valued the construction at Rs. 92, 000, but subsequently gave another report valuing the construction at the figure of Rs. 59, 000 which was less than the cost reported by the assessee in his return. The assessee owned half a share in the building which consisted of three floors and which yielded substantial rents annually. 2. The order of assessment had been made earlier on 10th January, 1973, for the asst. yr. 1970-71. That order had been challenged by the assessee, who took up the matter upto the Tribunal and the Tribunal had set aside that order with a direction that the ITO shall make further enquiry with regard to the cost of construction. After that order of remand, the ITO had rightly called for a report from an approved valuer, but before the report was submitted on 25th March, 1977, he passed fresh assessment order on 28th February, 1977, apparently in order to avoid the matter becoming time-barred. The valuer who submitted the report on 25th March, 1977, estimated the cost of construction at Rs. 1, 41, 750. The valuer who submitted the report on 25th March, 1977, estimated the cost of construction at Rs. 1, 41, 750. The CIT being of the opinion that the value so estimated by the valuer appointed by the ITO represented the correct figure, revised the order of ITO. 3. Against the order of the CIT revising the assessment made by the ITO, the assessee went in appeal to the Tribunal. The Tribunal while holding that the CIT had technical jurisdiction under s. 263 , nevertheless it was a case of the CIT clutching at the jurisdiction. The Tribunal came to that conclusion on the ground that the earlier order of assessment had not been sought to be revised by the CIT and that the revision of the later order was not really called for as that later order had been passed pursuant to a direction given by the Tribunal in an appeal which had been preferred by the assessee. The Tribunal also took the view that the valuation report which was furnished after the order of assessment was made could not properly be taken note of by the CIT for the purpose of exercising his jurisdiction under s. 263. 4. Learned counsel for the Revenue submitted that the view of the Tribunal is plainly erroneous and is unsustainable. Learned counsel invited our attention to the recent decision of the apex Court in the case of CIT vs. Shree Manjunathesware Packing Products & Camphor Works. The Court after noticing the Explanation under s. 263 added by the Amendment Act of 1988 and after noticing the history of the section, as also the pronouncements of the Courts on that section as it stood prior to 1988 held as under : "It, therefore, cannot be said, as contended by the learned counsel for the respondent, that the record and settled legal position, with respect to the meaning of the word "record" till 1st June, 1988, was that it meant the record which was available to the ITO at the time of passing of the assessment order. Further, we do not think that such a narrow interpretation of the word "record" was justified, in view of the object of the provision and the nature and scope of the power conferred upon the CIT. The revisional power conferred on the CIT under s. 263 is of wide amplitude. Further, we do not think that such a narrow interpretation of the word "record" was justified, in view of the object of the provision and the nature and scope of the power conferred upon the CIT. The revisional power conferred on the CIT under s. 263 is of wide amplitude. It enables the CIT to call for and examine the record of any proceeding under the Act. It empowers the CIT to make or cause to be made such enquiry as he deems necessary in order to find out if any order passed by the AO is erroneous insofar as it is prejudicial to the interests of the Revenue. After examining the record and after making or causing to be made an enquiry if he considers the order to be erroneous then he can pass the order thereon as the circumstances of the case justify. Obviously, as a result of the enquiry he may come in possession of new material and he would be entitled to take that new material into account. If the material which was not available to the ITO when he made the assessment could thus be taken into consideration by the CIT after holding an enquiry, there is no reason why the material which had already come on record, though subsequent to the making of the assessment, cannot be taken into consideration by him. Moreover, in view of the clear words used in cl. (b) of the Expln. to s. 263(1) , it has to be held that while calling for and examining the record of any proceeding under s. 263(1) , it is and it was open to the CIT not only to consider the record of that proceeding but also the record relating to that proceeding available to him at the time of examination." 5. The law laid down by the apex Court in that decision applies with full force to the facts of this case. The ITO had passed the assessment order after having called for a valuation report, but without waiting for the report to be submitted to him. That report which was subsequently submitted related to the proceedings and formed part of the record which was before the CIT when he examined the same. The ITO had passed the assessment order after having called for a valuation report, but without waiting for the report to be submitted to him. That report which was subsequently submitted related to the proceedings and formed part of the record which was before the CIT when he examined the same. It was certainly permissible for the CIT to look into that valuation report for the purpose of deciding as to whether the assessment made was prejudicial to the interest of the Revenue. The fact that the assessment year in question is 1971-72 which is long prior to the date of the amendment of s. 263 by the Finance Act, 1988, does not in any manner affect the ambit of the CIT's power under s. 263 as it has been laid down by the apex Court that even the view that prevailed with regard to s. 263 as it stood prior to 1988 was too narrow an interpretation of the word "record" and was unjustified. The Explanation added to s. 263(1) in the year 1988 is, therefore, to be regarded as declaratory. 6. In this view of the matter, the questions that have been referred to us are required to be answered in the negative, in favour of the Revenue and against the assessee and they are so answered. 7. The Tribunal not having gone into the merits of the case while making the order from out of which the questions referred have arisen, the Tribunal shall now proceed to consider the merits of the appeal filed before it by the assessee.