Law: Income Tax Act, 1961

Section: 263

Income-tax---Commissioner---Revision---Jurisdiction---Notice---Affording opportunity of hearing to assessee---Is matter of procedure which follows assumption of jurisdiction---Not in itself a condition precedent for assumption of jurisdiction---Having, assumed jurisdiction, no enforceable order can be passed by Commissioner without hearing assessee---Indian Income Tax Act, 1961,S.263. From a reading of section 263 of the Income Tax Act, 1961, it is manifest, that the Commissioner may make inquiry to find out whether an order passed by the assessing authority is erroneous and prejudicial to the interests of the Revenue without giving any notice to the assessee. Having assumed jurisdiction under section 263 for which no condition precedent is prescribed, the Commissioner before making an order under section 263 should give an opportunity of being heard to the assessee. It means no enforceable order could be passed by the Commissioner without hearing the assessee. But opportunity of hearing is not a condition precedent to assume the jurisdiction under section 263. Where the Commissioner of Income-tax passed an order under section 263 without giving an opportunity of being heard to the, assessee: Held, that the Tribunal was right in setting aside the order of the Commissioner of Income-tax and remitting the case to the Commissioner of Income-tax to make an order de novo after giving an opportunity of being heard to the assessee. CIT v. Electro House (1971) 82 ITR, 824 (SC) fol. JUDGMENT At the instance of the assessee, the Income-tax Appellate Tribunal referred the following -questions for the opinion of this Court for the assessment year 1970-71 under section 256(1) of the Income Tax Act, 1961 (briefly, the Act"): "(1) Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the Commissioner had rightly assumed jurisdiction under section 263 of the Income Tax Act, 1961, and that the affording of proper opportunity of being heard was a matter of procedure which followed the assumption o1 jurisdiction, and was not in itself a condition precedent for the assumption of jurisdiction? (2) Whether, on the facts and in the…

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