Natural justice in tax revision requires disclosure of adverse material; revisional order quashed for relying on undisclosed allegations.

Service of the proposed revision notice under section 33B of the Income-tax Act, 1922 was valid because it was attempted by registered post and personal delivery, and the surrounding facts showed receipt at the assessee's address by a family member residing there. The revisional order, however, was vitiated for breach of natural justice because the Commissioner relied on undisclosed adverse material, including allegations of fraud, collusion, interpolation and local enquiries, without putting the substance of that material to the assessee or adjourning the hearing to meet the new case. The revision therefore could not stand and was liable to be quashed.

---

---

Issues: (i) Whether notice of the proposed revision under section 33B of the Income-tax Act, 1922 was duly served on the assessee; (ii) Whether the Commissioner's revisional order was invalid for breach of natural justice because it relied on grounds, allegations and enquiry results not disclosed to the assessee.

Issue (i): Whether notice of the proposed revision under section 33B of the Income-tax Act, 1922 was duly served on the assessee.

Analysis: Service was attempted both by registered post and by personal delivery. The surrounding facts showed that the registered notice was received at the assessee's address and the personal notice was accepted by an adult male member of the family residing there. No satisfactory material established that the assessee was away from Calcutta or that the recipient was not residing with her at the material time.

Conclusion: The notice was duly served.

Issue (ii): Whether the Commissioner's revisional order was invalid for breach of natural justice because it relied on grounds, allegations and enquiry results not disclosed to the assessee.

Analysis: Section 33B required an opportunity of being heard, and where the Commissioner relied on adverse material obtained by enquiry he was bound to disclose the substance of that material to the assessee. The revisional order went beyond the grounds stated in the notice, and proceeded on serious allegations of fraud, collusion, interpolation of records and undisclosed local enquiries. Those matters were not put to the assessee, and the hearing was not adjourned to meet the fresh case. In such circumstances, the order was contrary to the rules of natural justice and could not stand, even if the order had the effect of leaving the matter time-barred for further revision.

Conclusion: The revisional order was vitiated and liable to be quashed.

Final Conclusion: The assessment revision failed because, although service of notice was valid, the revisional authority could not base its decision on undisclosed adverse material and new charges without giving the assessee a fair opportunity to answer them.

Ratio Decidendi: When a quasi-judicial authority proposes to act on adverse material or fresh grounds not disclosed in the notice, the substance of that material must be communicated to the affected party and a fair opportunity to meet it must be given; otherwise the decision is void for breach of natural justice.

---