1982 (8) TMI 70 - AT - Income Tax

Summary

Issues:
1. Setting aside of assessment orders by the Commissioner and the issue of investment allowance.
2. Validity of the Commissioner's order under section 263 for the assessment year 1978-79.

Analysis:
1. The judgment dealt with the setting aside of assessment orders by the Commissioner under section 263 of the Income-tax Act, 1961, and the issue of investment allowance. The Commissioner directed the Income Tax Officer (ITO) to re-examine the assessee's claim for investment allowance thoroughly in accordance with the law and relevant judicial decisions. The ITO was given the liberty to decide the issue independently, unfettered by the Commissioner's views expressed in the order. The tribunal found no basis for the concerns raised by the assessee's counsel regarding the Commissioner's directions and upheld the setting aside of the assessment orders.

2. The validity of the Commissioner's order under section 263 for the assessment year 1978-79 was challenged by the assessee on the grounds of lack of a written notice proposing the action to the assessee. The assessee argued that the proceedings were not correctly initiated as no formal notice was issued. However, the revenue contended that communication of the proposed action to the assessee and providing an opportunity to be heard were the essential requirements, not necessarily a written notice. The tribunal noted that the facts for both assessment years were similar, and the assessee was duly informed about the proposed action for the earlier year. The tribunal found that the communication with the assessee's authorized counsel, explanation of the point, and hearing provided to the counsel amounted to providing an opportunity of being heard to the assessee. Therefore, the tribunal rejected the preliminary objection raised by the assessee regarding the validity of the Commissioner's order for the assessment year 1978-79.

In conclusion, the tribunal dismissed the appeals of the assessee for both years, upholding the setting aside of assessment orders by the Commissioner and confirming the validity of the Commissioner's order under section 263 for the assessment year 1978-79.