Natural justice and territorial jurisdiction in income-tax revision: recorded material and rushed assessments can justify cancellation.

The commentary explains that a revisional order under section 33B will not be invalidated for breach of natural justice where the decisive basis is material already on record and available to the assessee. It also notes that territorial jurisdiction for assessment under section 64 of the Income-tax Act, 1922 depends on residence or place of business, and that returns themselves may show lack of jurisdiction. Where the record indicates hurried assessments made without proper enquiry, the revisional power may be used to cancel them for want of jurisdiction and improper assessment procedure.

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Issues: (i) Whether the Commissioner's order under section 33B was invalid for violation of natural justice because it relied on materials said to have been collected behind the assessee's back. (ii) Whether the assessment orders were rightly cancelled on the ground that the Income-tax Officers lacked jurisdiction and had completed the assessments without proper enquiry.

Issue (i): Whether the Commissioner's order under section 33B was invalid for violation of natural justice because it relied on materials said to have been collected behind the assessee's back.

Analysis: The impugned order was examined as a whole. The decisive basis for the Commissioner's action was not the undisclosed material about residence in East Pakistan, but the assessee's own statements in the returns and the surrounding record. The Commissioner's observations regarding undisclosed facts were at most supporting matter and did not constitute the foundation of the decision. Since the order could stand independently on materials already available to the assessee, no breach of natural justice was made out.

Conclusion: The challenge on the ground of violation of natural justice failed.

Issue (ii): Whether the assessment orders were rightly cancelled on the ground that the Income-tax Officers lacked jurisdiction and had completed the assessments without proper enquiry.

Analysis: Under section 64 of the Income-tax Act, 1922, jurisdiction depended on the place of business or residence, as the case might be. The assessee's own returns disclosed addresses that showed the relevant Income-tax Officers did not have territorial jurisdiction. The record also showed that the assessments were made in great haste, with notices and hearings closely compressed in time, supporting the conclusion that the assessments were made post-haste and without the enquiry required by the circumstances. These materials were sufficient to justify revision under section 33B.

Conclusion: The Commissioner was justified in cancelling the assessments for want of jurisdiction and improper assessment procedure.

Final Conclusion: The impugned revisional order was sustained because the assessments were found to be without jurisdiction and the alleged natural justice objection did not vitiate the decision.

Ratio Decidendi: An administrative or quasi-judicial order will not fail for want of natural justice where the decisive basis for the order is material already on the record and available to the affected party, and a revisional authority may set aside assessments that are shown by the assessee's own returns and the record to have been made without territorial jurisdiction.

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