1983 (9) TMI 77 - HC - Income Tax

Summary

Issues Involved:
1. Whether the service of the notice on Shri Rawat Singh complied with the requirements of section 263 that the assessee should be provided a reasonable opportunity of being heard against the proposed order under section 263?

Summary:

Issue 1: Compliance with Section 263 Notice Requirements
The court examined whether the service of notice on Shri Rawat Singh, who held a power of attorney for the assessee, complied with the requirements of section 263 of the Income-tax Act, 1961. The assessee had not filed an estimate nor paid advance-tax for the assessment year 1961-62, leading the Commissioner of Income-tax (CIT) to initiate proceedings under section 263 for revision of the assessment order. The CIT issued a notice to the assessee, which was returned with the postal remark "left without address." Subsequently, a notice was served on Shri Rawat Singh, who had a power of attorney limited to the assessment proceedings for the year 1961-62.

The Tribunal concluded that the notice was not properly served on the assessee and that the power of attorney did not authorize Shri Rawat Singh to receive notices for proceedings under section 263. The court agreed, stating that the power of attorney was limited to the assessment proceedings and did not extend to revision proceedings under section 263. The court emphasized that section 263 requires the assessee to be given an opportunity of being heard, and the service of notice on Shri Rawat Singh did not meet this requirement.

Conclusion:
The court answered the referred question in the negative, holding that the service of notice on Shri Rawat Singh did not comply with the requirements of section 263, and thus, the assessee was not provided a reasonable opportunity of being heard. The decision was in favor of the assessee and against the Revenue. There was no order as to costs.