TaxTMI 
TaxTMI 
1981 (12) TMI 17
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....rements of law and was a valid notice and, therefore, the CIT exercised his jurisdiction validly ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that proper opportunity of being heard was not afforded to the assessee ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the order passed by the Commissioner of Income-tax under section 263 was void ab initio ? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in refusing to direct the CIT to pass a fresh order under section 263 of the I.T. Act, 1961, after giving the assessee a further opportunity of being heard ? " The....
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....ssessee on April 26, 1973, and the Commissioner passed a consolidated order for the two assessment years. The Commissioner held that the order of the ITO exempting the profits earned by the assessee by sale of land was erroneous and prejudicial to the Revenue as the amount was chargeable to tax as income from business carried on by the assessee because the transaction amounted to an adventure in the nature of trade. The Commissioner, therefore, set aside the assessments made by the ITO and directed him to make fresh assessments in accordance with law. Aggrieved by this order, the assessee preferred appeals before the Tribunal. There was a difference of opinion in the Bench, which heard the appeal. The learned judicial Member of the Tribunal....
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.... the assessee of being heard. The section does not speak of any notice. It is unfortunate that the High Court failed to notice the difference in language between sections 33B and 34. For the assumption of jurisdiction to proceed under section 34 the notice as prescribed in that section is a condition precedent. But no such notice is contemplated by section 33B. The jurisdiction of the Commissioner to proceed under section 33B is not dependent on the fulfilment of any condition precedent. All that he is required to do before reaching his decision and not before commencing the enquiry, is that he must give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary. Those requirements have nothing t....
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....s notice to the assessee, as urged by the Revenue. It must, therefore, be held that there was no proper opportunity to the assessee to show cause why an order against the assessee be not passed by the Commissioner under s. 263(1) of the Act. Oar answer to the second question is, therefore, in the affirmative and against the Department. Question No. (3): Learned counsel for the assessee contended that the Tribunal having found, by a majority decision, that by not giving proper opportunity to the assessee before passing an order under s. 263(1) of the Act, the Commissioner had violated the principles of natural justice, the Tribunal was right in holding that the order of the Commissioner was void ab initio. The contention cannot be upheld.....
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....has no impact on the question of jurisdiction of the Commissioner to pass an order under s. 263(1) of the Act. The question of adequate opportunity will affect only the question of legality of the order of the Commissioner. In such a case, the Tribunal undoubtedly had jurisdiction to remand the matter to the Commissioner and to direct him to dispose of the proceedings under s. 263(1) of the Act, afresh, after giving due opportunity to the assessee. This question came up for consideration before the Supreme Court in CIT v. National Taj Traders [1980] 121 ITR 535. The Tribunal in that case had held that the Commissioner had not conformed to the requirements of natural justice by putting it to the assessee what case it had to meet and by givin....