Tribunal upholds Commissioner decision on assessment orders, allows re-examination of investment allowance issue.

The Tribunal upheld the Commissioner's decision to set aside the assessment orders for the assessee, allowing the Income Tax Officer to re-examine the investment allowance issue. The Tribunal rejected the assessee's objection to the lack of a written notice for the assessment year 1978-79, deeming communication to the assessee's counsel and the opportunity to be heard as sufficient. As a result, the appeals were dismissed, affirming compliance with legal requirements for notification and hearing procedures.

---

---

Issues:
- Setting aside of assessment orders by the Commissioner
- Lack of notice in writing for action under section 263 for the assessment year 1978-79
- Adequacy of opportunity of being heard for the assessee

Analysis:
1. The judgment pertains to a combined order under section 263 of the Income-tax Act, 1961, by the Commissioner, Baroda, involving appeals for the assessment years 1977-78 and 1978-79. The appeals were disposed of conveniently through a combined order due to similar facts.

2. On the merits of the case, the setting aside of the assessment orders by the Commissioner was acceptable to the assessee's counsel, provided the issue of investment allowance was left open for the Income Tax Officer (ITO) to decide in accordance with the law. The Commissioner's directions did not restrict the ITO to act in accordance with the Commissioner's views, allowing the ITO to re-examine the claim for investment allowance afresh.

3. For the assessment year 1978-79, a preliminary objection was raised regarding the lack of a written notice proposing action under section 263 to the assessee. The assessee argued that the proceedings were not correctly initiated as no written notice was issued. However, the revenue contended that communication to the assessee's counsel and providing an opportunity to be heard were sufficient, as evidenced by the authority letters filed by the counsel.

4. The Tribunal considered the preliminary objection and found no substance in the grievance of the assessee. It was established that the facts for both assessment years were similar, and the assessee was duly notified about the proposed action under section 263 for the earlier year. The Tribunal emphasized that the essence of the law was to provide the assessee with an effective opportunity to defend themselves, which was adequately fulfilled in this case.

5. Ultimately, the Tribunal rejected the preliminary contention of the assessee regarding the lack of a written notice for the assessment year 1978-79. The Tribunal upheld the submissions of the departmental representative, concluding that the communication to the assessee's counsel and the opportunity provided for being heard were in compliance with the requirements of the law.

6. Consequently, the appeals of the assessee for both years were treated as dismissed for statistical purposes, based on the findings and analysis presented in the judgment.

---