Law:

Section:

Section 263 of the Income-tax Act, 1961 (Corresponding to section 33B of Indian Income-tax Act, 1922) - Revision-of orders prejudicial to interest of revenue - Assessment years 1953-54 to 1960-61 - Commissioner set aside assessment orders passed by ITO on ground that he had no jurisdiction over assessee and that he accepted initial investment and business income without making any enquiry - Tribunal set aside order of Commissioner on ground that he passed order on wrong premises that ITO had no jurisdiction over assessee and said order was passed without giving opportunity of hearing to assessee - Whether in view of fact that ITO who made assessment had only jurisdiction over cases of assessee whose name began with alphabets from 'S' to 'Z' and since assessee's name started with alphabet 'P' Commissioner rightly held that ITO had no jurisdiction over assessee - Held, yes - Whether since Commissioner directed ITO to make fresh assessment after making enquiry, assessee would get full opportunity to produce evidence if any to support her case and, therefore, there was no violation of principle of natural justice by order of Commissioner - Held, yes - Whether moreover, when Commissioner had demonstrated by facts and figures that assessment orders were prejudicial to interests of revenue, Tribunal was not justified in setting aside order of Commissioner - Held, yes FACTS The assessee filed voluntary returns of income showing income from business in speculation and income from interest. The ITO completed assessment making minor additions. On examination of records the Commissioner found the assessment orders to be prejudicial to interest of the revenue and therefore issued notice under section 33B of the 1922 Act stating that the ITO was not justified in accepting initial capital, income from business etc. without any enquiry. As the assessee failed to produce any evidence before the Commissioner, he set aside assessments and directed ITO to decide cases afresh after making enquiry. On appeal, the Tribunal set aside the order of the Commissioner on the ground that the Commissioner based his order on wrong premises and that the assessee was not given opportunity of…

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