1997 (4) TMI 35

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....ax Act, 1961, and that the affording of proper opportunity of being heard was a matter of procedure which followed the assumption of jurisdiction, and was not in itself a condition precedent for the assumption of jurisdiction? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that even though the order under section 263 was passed in violation of principles of natural justice and the mandatory provision it would not be correct in law to quash it as an order void ab initio and that the correct view of law would be to restore the case back to the Commissioner with the direction that he would remove the defect which supervened the original proceedings and would redetermine the issue in accor....

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....d prejudicial to the interests of the Revenue. The Commissioner of Income-tax, therefore, called upon the assessee to appear on March 10, 1976, before him and explain the abovementioned discrepancies. The assessee on receipt of the notice requested the Commissioner of Income-tax for further time up to April 10, 1976, to comply with the notice. The Commissioner of Income-tax did not accept the assessee's request, as the period of limitation as set out under sub-section (2) of section 263 was to expire on March 16, 1976. The Commissioner of Income-tax made an order under section 263. Before the Appellate Tribunal, the assessee contended on appeal that the order passed under section 263 was a nullity, inasmuch as that was made by the Commis....

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....Revenue without giving any notice to the assessee. Having assumed jurisdiction under section 263 for which no condition precedent is prescribed, the Commissioner before making an order under section 263 should give an opportunity of being heard to the assessee. It means no enforceable order could be made by the Commissioner without hearing the assessee. But opportunity of hearing is not a condition precedent to assume the jurisdiction under section 263. The view taken by the Appellate Tribunal is fortified by the decision of the Supreme Court in the case of CIT v. Electro House [1971] 82 ITR 824. In this case the Supreme Court considered section 33B of the Indian Income-tax Act, 1922, which is analogous to section 263 of the Act of 1961.....