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Issues involved: Challenge to the validity of orders made by the Commissioner of Income-tax u/s 263 of the Income-tax Act, 1961.
Summary: In a batch of writ petitions challenging the validity of orders made by the Commissioner of Income-tax u/s 263 of the Income-tax Act, 1961, the petitioners, including a lady, filed voluntary returns of income for multiple assessment years. The Commissioner set aside the assessments, directing the Income-tax Officer to re-do them, after finding discrepancies in the income declarations and lack of evidence of money-lending business. The primary question was whether the Commissioner was justified in invoking his power u/s 263 of the Act. The assessments were deemed erroneous and prejudicial to revenue due to lack of proper enquiry or evidence. The assessments were spread over past years without justification, contrary to the law. The Commissioner's revision of the assessments was upheld based on legal principles and the need for proper assessment procedures. The petitioners were not prejudiced as they would have the opportunity to prove the correctness of the assessments in the fresh assessments directed by the Commissioner. The petitioners challenged the orders under Article 226 of the Constitution, claiming no alternate remedy. However, the court noted that the orders were appealable to the Tribunal u/s 253(l)(c) of the Act, providing a complete mechanism for relief against improper actions by tax authorities. The court entertained the case to examine the validity of contentions raised by both sides. The assessments were found to be erroneous and prejudicial to revenue due to lack of proper enquiry or evidence, justifying the Commissioner's revision u/s 263 of the Act. The assessments were spread over past years without justification, contrary to the law. The Commissioner's revision was deemed appropriate based on legal principles and the need for proper assessment procedures. The petitioners were not prejudiced as they would have the opportunity to prove the correctness of the assessments in the fresh assessments directed by the Commissioner.
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