RAJ KISHORE PRASAD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS petition under article 226 of the Constitution has been filed by the assessee in the circumstances stated hereinafter.

(2.) THE petitioner was assessed to income-tax for the assessment year 1974-75 for the first time on 5th October, 1974, by the TTO, "A" Ward, Circle II, Lucknow. A copy of the assessment order is annexure 1 to the writ petition. A notice was thereafter issued under Section 154 of the I.T. Act, 1961, to the assessee regarding the excess rebate allowed to him. It appears that the assessee had no objection to the proposed rectification, hence the mistake was rectified by order dated 12th February, 1975 (annexure 2) to the writ petition. It further appears that a notice under Section 210 was issued for this year demanding an advance tax of Rs. 3,368 which was revised to Rs. 5,449 on 17th December, 1973, under Section 210(3) of the I.T. Act. THE Commissioner took up the matter suo motu and passed order under Section 263(1) of the I.T. Act, 1961, on 30th September, 1976. A copy of that order is annex. 3, a perusal whereof would indicate that the Commissioner was of the view that as the assessee had failed to file an estimate of the advance tax under Section 212(1) penalty was leviable in this case ; but the ITO had not charged that interest hence the assessment made by him was prejudicial to the interest of the Revenue. A show cause notice under Section 263(1) of the Act was accordingly issued and the Commissioner set aside the assessment order aforesaid passed by the ITO and directed the ITO to make a fresh assessment according to law. THE assessee feeling aggrieved went up in appeal before the Income-tax Appellate Tribunal on the ground, inter alia, that he was not afforded an adequate opportunity to put up his defence before the Commissioner because the notice under Section 263(1) of the Act was dated 27th September, 1976, while the order passed by the Commissioner was dated 30th September, 1976. THE Appellate Tribunal being of the view that the assessee did not have a reasonable opportunity of placing his case before the CIT held that the order of the Commissioner was violative of the principles of natural justice and was, therefore, not sustainable. THE appeal was accordingly allowed and the order of the Commissioner was set aside and the Commissioner was directed to give an opportunity to the assessee on the question of the leviability of interest and, after considering the assessee's plea, to pass order according to law. THE proceedings were remanded and it appears from annexure 7 that the assessee had made certain submissions in writing on 22nd January, 1979, before the Commissioner and supplemented those submissions by another representation dated 19th March, 1979 (annexure 7), whereupon the Commissioner passed the following order :

(3.) IN the result the petition is allowed with costs. The assessment order dated 15th February, 1977 (annexure 4) and the order under Section 154 dated 7th March 1977, are quashed and the respondent No. 1 is directed to refund to the petitioner any amount which might have been recovered from him in excess of the amount payable by the petitioner with respect to the assessment year 1974-75 as per orders dated 5th October, 1974 and 12th February, 1975 (annexures 1 and 2).