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Issues Involved:
1. Validity of service of notice. 2. Opportunity of being heard and adherence to natural justice. 3. Validity of the Commissioner's order under section 33B of the Income-tax Act. Issue-wise Detailed Analysis: 1. Validity of Service of Notice: The first issue addressed was whether the notice was served on the petitioner in accordance with the law. Under section 63 of the Income-tax Act, a notice may be served by post or as if it were a summons issued by a court under the Code of Civil Procedure, 1908. The petitioner claimed that she was not in Calcutta during the relevant dates due to mourning her husband's death and that the registered letter was received by her minor daughter, while personal service was made on her adult son, R.S. Khemka, who did not reside with her. The court examined the evidence, including letters and affidavits, and concluded that R.S. Khemka, an adult male member of the family, was residing with the petitioner at the relevant time. Therefore, the notice was duly served. 2. Opportunity of Being Heard and Adherence to Natural Justice: The second issue was whether the petitioner was given an opportunity of being heard as mandated by section 33B of the Income-tax Act. The petitioner argued that the order made by the Commissioner on February 7, 1963, violated the principles of natural justice. The court referred to the Supreme Court's decision in Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax, which established that income-tax authorities must disclose information derived from outside sources to the assessee and provide an opportunity to rebut it. The court found that the Commissioner had relied on grounds not disclosed to the petitioner, including allegations of fraud and collusion with the Income-tax Officer, and had not provided her with an opportunity to address these serious charges. The court held that the Commissioner should have adjourned the hearing to communicate these new grounds to the petitioner. 3. Validity of the Commissioner's Order under Section 33B of the Income-tax Act: The final issue was the validity of the Commissioner's order under section 33B. The court noted that section 33B empowers the Commissioner to revise any order passed by the Income-tax Officer if it is erroneous and prejudicial to the interests of the revenue, provided the assessee is given an opportunity of being heard. The court found that the Commissioner had relied on undisclosed grounds and information, including allegations of fraudulent conduct and interpolation of records, which were not communicated to the petitioner. The court concluded that the order was made in violation of the principles of natural justice and was therefore invalid. Consequently, the court quashed the Commissioner's order dated February 7, 1963, and issued a writ of mandamus directing the respondents not to give effect to it. However, the court clarified that this would not prevent the respondents from taking any other steps against the petitioner under the Income-tax Act or any other law, provided they proceed in accordance with the law. Conclusion: The court made the rule absolute, quashing the Commissioner's order dated February 7, 1963, and directing the respondents not to give effect to it. The court emphasized the importance of adhering to the principles of natural justice and providing the assessee with a fair opportunity to address any adverse information or allegations.
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