Revision under Section 263 requires effective hearing and proper inquiry; matter remanded for fresh consideration.

Section 263 revision may be sustained only where the assessee has been given a clear and effective opportunity to meet the issues ultimately relied on, even if they extend beyond the exact grounds in the notice. Here, the record did not clearly establish that such opportunity was afforded on the decisive points, and the underlying factual controversy on alleged lack of inquiry had not been properly examined by the revisional authority. The Tribunal therefore treated remand as the proper course and restored the matter for fresh adjudication after hearing the assessee.

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Issues: Whether the revisionary order under section 263 was liable to be quashed for want of proper opportunity and for failure to examine the matter before directing fresh inquiry, or whether the matter should be remanded for fresh consideration.

Analysis: The Tribunal noted that revision under section 263 can extend beyond the exact grounds mentioned in the notice if the assessee is afforded a proper opportunity of being heard. The record did not clearly show that such opportunity was effectively given on the ultimately relied-upon issues. At the same time, the Tribunal held that it should not itself decide the factual controversy on the basis of materials said to have been placed before the Assessing Officer, because the correctness of those averments and the adequacy of inquiry had not been properly examined by the revisional authority. Applying the principles governing revisionary jurisdiction and remand, the Tribunal found that the proper course was to set aside the revisional order and restore the matter to the Commissioner for fresh adjudication after hearing the assessee.

Conclusion: The revision order was set aside and the matter was remanded for de novo consideration after granting the assessee a proper opportunity of being heard.

Ratio Decidendi: Where a revisional order under section 263 suffers from an incomplete or unclear opportunity of hearing, and the factual issue underlying the finding of lack of inquiry has not been properly examined, the appellate forum may set aside the order and remit the matter for fresh decision rather than decide the factual controversy itself.

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