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Challenge to notice under section 263 of the Income-tax Act for the assessment year 1976-77. Allegation of lack of reasonable opportunity and improper service of notice. Analysis: The petitioner, a registered firm, challenged a notice dated November 24, 1978, issued under section 263 of the Income-tax Act for the assessment year 1976-77. The petitioner claimed that an earlier notice dated November 18, 1978, was not served upon them, and they only received the notice dated November 24, 1978. The petitioner requested an adjournment to comply with the notice, which was denied. An interim order was obtained to restrain the respondents from proceeding with the notice under section 263. The main ground of the petition was the lack of reasonable opportunity as required under section 263 and improper service of the notice as per section 282 of the Act. The respondents did not file an affidavit-in-opposition, leaving the allegations uncontroverted. The petitioner contended that they were not given a reasonable opportunity to be heard, as all partners were not available at the time of the notice. The court clarified that section 263 does not mandate a notice before the Commissioner proceeds to revise an order, but it requires giving the assessee an opportunity to be heard. The jurisdiction of the Commissioner is not dependent on issuing a notice, but on providing a reasonable opportunity for the assessee to respond. Despite the notice being received on November 25, 1978, for a hearing on November 28, 1978, the court acknowledged the difficulty faced by the petitioner due to unavailability of partners. Thus, the Commissioner was directed to hear the matter again after providing another opportunity for the petitioner to be heard. The court disposed of the application by setting aside any order passed by the Commissioner before the interim order and directing a fresh order after giving the petitioner an opportunity to be heard. If no order was passed, the final order was not to be issued before a specified date. The petitioner agreed to cooperate with the Department, and the rule was disposed of with no order as to costs.
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