Fair hearing in rectification proceedings and concurrent territorial jurisdiction upheld; ex parte tribunal order set aside.

An order on a rectification application under the Income-tax Act cannot be made behind the affected party's back; where the Tribunal decided the matter in chambers without hearing the petitioner, the order was quashed and the case remitted for fresh decision after hearing. A territorial objection was also rejected because the impugned order was made by the Tribunal within the Court's territorial jurisdiction, and the mere fact that another High Court may also have jurisdiction does not oust jurisdiction here. The writ petition therefore succeeded, with the jurisdictional challenge overruled.

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Issues: (i) Whether the order of the Income-tax Appellate Tribunal deciding the application under section 254(2) of the Income-tax Act, 1961, in chambers without affording an opportunity of hearing was liable to be quashed; (ii) whether the Delhi High Court lacked jurisdiction to entertain the writ petition because the Income-tax Officer and the Appellate Assistant Commissioner were situated at Allahabad.

Issue (i): Whether the order of the Income-tax Appellate Tribunal deciding the application under section 254(2) of the Income-tax Act, 1961, in chambers without affording an opportunity of hearing was liable to be quashed.

Analysis: An application under section 254(2) affecting the petitioner could not be decided behind the petitioner's back. The impugned order was passed without hearing the petitioner, which offended the requirement of fair hearing.

Conclusion: The order of the Tribunal was quashed and the matter was remitted to the Tribunal for fresh decision after affording hearing to the petitioner.

Issue (ii): Whether the Delhi High Court lacked jurisdiction to entertain the writ petition because the Income-tax Officer and the Appellate Assistant Commissioner were situated at Allahabad.

Analysis: The objection based on the location of the Income-tax Officer and the Appellate Assistant Commissioner was distinguished because the impugned order was passed by the Tribunal within the territorial jurisdiction of the Court. The existence of possible jurisdiction in the Allahabad High Court did not exclude the jurisdiction of this Court.

Conclusion: The preliminary objection to jurisdiction was rejected.

Final Conclusion: The writ petition succeeded, the Tribunal's order was set aside, and the matter was sent back for reconsideration after hearing the petitioner, while the jurisdictional objection was overruled.

Ratio Decidendi: An adjudicatory order affecting rights cannot stand if passed without affording hearing, and territorial jurisdiction is not excluded merely because another High Court may also have jurisdiction when the impugned order is made by an authority within the Court's own jurisdiction.

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