Law:

Section:

Section 263 of the Income-tax Act, 1961 [Corresponding to section 33B of the Indian Income-tax Act, 1922] - Revision of orders prejudicial to interest of revenue - Assessment years 1953-54 to 1961-62 - Whether if commissioner, for purpose of revising an order, relies on several materials for substantiating a ground disclosed to assessee, and use of some of materials be objected to on plea that materials had not been disclosed to assessee, care must be taken to see whether those materials were basis materials on which ground was taken to be established; if disclosed ground was otherwise established and undisclosed materials were utilized merely as supporting materials for Commissioner finding, finding need not be interfered with - Held, yes FACTS The assessee filed voluntary returns of income for the assessment years 1953-54 to 1959-60 and also for the year 1960-61, all in the year 1961. The ITO completed the assessment. On 28-2-1963, the Commissioner sent a notice under section 33B of 1922 Act to the assessee stating that assessment passed by ITO were erroneous and prejudicial to interest of revenue for the reasons that assessee never resided at the place of residence mentioned in return and ITO also that the was not justified in accepting the initial capital, the income from business etc., without any enquiry or evidence. The assessee replied the notice in writing. However, on the date fixed for hearing, nobody appeared before the Commissioner for the assessee. Thereupon, the Commissioner passed an order cancelling the previous assessment and directing the ITO make fresh assessment according to law. Aggrieved by the order, the assessee filed instant petition praying for a writ of certiorari for the quashing of the impugned order and for a writ of mandamus directing the Commissioner to recall the order and obtained this rule. The assessee had challenged impugned order on the ground that the Commissioner in passing the said order had relied upon materials collected behind the back of the assessee without giving an opportunity of being heard in rebuttal of those materials and had thus violated the principles of natural justice and also violated the express…

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