Subsequent developments can justify remand for fresh disposal of section 132 orders, while interim restraint may continue.

Where subsequent developments undermine the basis of orders passed under section 132 of the Income-tax Act, the matter should be restored for fresh consideration on all relevant facts after hearing the assessee. The Supreme Court set aside the impugned orders and remitted the petitions to the Commissioners for reconsideration in accordance with law, because the assessment order relied on had itself been set aside for being redone and other relevant facts required examination. Pending such fresh disposal, the restraint orders under section 132(5) and actions taken in pursuance of them were directed to continue.

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Issues: Whether the orders passed by the Commissioners under section 132 of the Income-tax Act could be sustained in view of subsequent developments, and whether the petitions filed by the assessee required fresh disposal.

Analysis: The Commissioners had earlier allowed the assessee's petitions for release of the pay orders under section 132(12), but one of those orders was later revised and the petition was dismissed on the basis of a subsequent assessment order. Since that assessment order had itself been set aside for being redone, and other relevant facts were stated to require consideration, the existing orders were considered unsuitable for final retention. The proper course was to restore the petitions to the Commissioners for reconsideration afresh in accordance with law, after hearing the assessee. Pending such reconsideration, the restraint orders under section 132(5) and actions taken in pursuance thereof were directed to continue.

Conclusion: The impugned orders were set aside and the petitions were remitted to the Commissioners for fresh disposal after hearing the assessee; the matter was not decided on merits.

Final Conclusion: The assessee obtained a remand for fresh adjudication, while the interim restraint under section 132(5) remained operative until such disposal.

Ratio Decidendi: Where material subsequent developments affect the foundation of an order passed under section 132, the matter should be restored for fresh decision on all relevant facts after giving an opportunity of hearing.

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