Concurrent use of assessment directions and revision powers is valid, but prejudicial directions require prior hearing.

Section 144A can be invoked during pending Section 144B proceedings to direct enhancement of the gross profit rate, but any prejudicial direction requires the assessee to be given an opportunity of being heard before it is issued. The same direction may also be sustained as a consolidated order under Sections 144B and 144A, provided that this procedural safeguard is observed. The decisive legal point is that concurrent exercise of the two provisions is permissible, but adverse directions remain subject to the statutory hearing requirement.

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Issues: (i) Whether, in a reference under Section 144B of the Income-tax Act, 1961, the Inspecting Assistant Commissioner could direct enhancement of the gross profit rate by invoking Section 144A. (ii) Whether such a direction could be sustained as a consolidated order under Sections 144B and 144A.

Issue (i): Whether, in a reference under Section 144B of the Income-tax Act, 1961, the Inspecting Assistant Commissioner could direct enhancement of the gross profit rate by invoking Section 144A.

Analysis: The power under Section 144A is available even while a reference under Section 144B is pending. However, where the proposed direction is prejudicial to the assessee, the proviso to Section 144A requires that the assessee be given an opportunity of being heard before the direction is issued.

Conclusion: The question was answered in the affirmative, subject to compliance with the proviso requiring an opportunity of hearing.

Issue (ii): Whether such a direction could be sustained as a consolidated order under Sections 144B and 144A.

Analysis: Since the direction could validly be issued under Section 144A during the pendency of proceedings under Section 144B, the order could be sustained by reference to both provisions, provided the procedural safeguard of hearing was observed where the direction was adverse to the assessee.

Conclusion: The question was answered in the affirmative, subject to compliance with the proviso requiring an opportunity of hearing.

Final Conclusion: The reference was disposed of by holding that the impugned direction was within jurisdiction under Section 144A during Section 144B proceedings, if the assessee was first heard when the direction was prejudicial.

Ratio Decidendi: The power to issue directions under Section 144A can be exercised during proceedings under Section 144B, but any prejudicial direction must comply with the statutory requirement of affording the assessee an opportunity of being heard.

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