Decided on August 19,1982



P.K. Mehta, Accountant Member - (1.) RELATING to a combined order under Section 263 of the Income-tax Act, 1961 ('the Act') by the Commissioner, Baroda, and on merits involving similar facts, both these appeals of the assessee for the assessment years 1977-78 and 1978-79 are conveniently disposed of by a combined order.
(2.) On merits the setting aside of the assessment orders by the Commissioner as per directions in paras 4 to 7 of his order was acceptable to the assessee's learned counsel, Shri K.C. Patel, provided there was no dispute that the Commissioner had kept the issue of investment allowance open for the ITO to decide in accordance with law and not necessarily in accordance with the opinion expressed by the Commissioner in his order. Shri Harne, the departmental representative, stated that it was clear from the reading of paras 4 to 7 that the Commissioner had left the entire issue open to the ITO to be decided in accordance with law and had not fettered him in any manner. We have gone through paras 4 to 7 of the order of the Commissioner and are also of the view that the directions given by the Commissioner to the ITO do not restrict him to act in accordance with the views expressed by the Commissioner in his order. He has clearly stated that the ITO was to re-examine the assessee's claim for investment allowance afresh thoroughly in the light of the relevant provisions of law covering the deductions on account of investment allowance under Section 32A of the Act as well as the relevant judicial decisions and then reframe the assessments for the two years under appeal after hearing the assessee. Consequently, we find no basis for the fears expressed by Shri K.C. Patel and make it clear once again that the ITO is fully at liberty to decide the issue in accordance with law unfettered by the views expressed by the Commissioner in the order under appeal.
(3.) HOWEVER, for the assessment year 1978-79, Shri Patel raised a preliminary objection, viz., as the Commissioner had not given a notice in writing proposing taking of action under Section 263 to the assessee, the order of the Commissioner was bad in law and according to him the proceedings were not correctly initiated. He invited our attention to para 4.5 of the order of the Commissioner to show that no notice in writing was issued to the assessee for the assessment year. It was further the contention of Shri Patel that merely hearing the assessee's counsel, Shri N.M. Ghoel, Advocate, would not amount to an opportunity of being heard provided to the assessee. He vehemently contended that the Commissioner started action simultaneously under Section 263 for the assessment year 1978-79 with the action taken for the earlier year. On this preliminary ground, it was submitted that the order for 1978-79 should not be upheld.;

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