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1. Validity of the order passed by the Income-tax Officer under section 144B of the Income-tax Act, 1961. 2. Jurisdiction of the Commissioner of Income-tax under section 263 of the Act. Analysis: The judgment pertains to the assessment year 1973-74 and revolves around the order passed by the Income-tax Officer on April 7, 1976, under section 144B of the Income-tax Act, 1961. The Income-tax Officer determined the income of the assessee at Rs. 5,24,510, which was higher than the returned income of Rs. 2,77,264. The assessee did not file any objections to this order within the specified period, leading to the order being considered final. Subsequently, the assessee appealed to the Appellate Assistant Commissioner against this order (paragraph 3). The Commissioner of Income-tax, Jullundur, issued notices under section 263 of the Act to the assessee, questioning the validity of the Income-tax Officer's order. Initially, the proceedings to cancel the Income-tax Officer's order were dropped as it was deemed a draft order. However, the Commissioner later issued another notice under section 263, leading to the cancellation of the Income-tax Officer's order on December 18, 1976 (paragraphs 4-6). Upon appeal, the Tribunal held that the Commissioner had assumed jurisdiction under section 263 without establishing the necessary jurisdictional facts, leading to the cancellation of the Commissioner's order (paragraph 7). The questions of law referred to the court focused on whether the Tribunal's decision was justified and whether the Commissioner's order under section 263 was sustainable. The court answered these questions in the affirmative, ruling in favor of the Revenue. The court emphasized that the erroneous order by the Income-tax Officer was indeed prejudicial to the Revenue's interests, meeting the prerequisites for the Commissioner's intervention under section 263. Therefore, the Tribunal's decision was deemed erroneous, and the reference was answered accordingly (paragraphs 8-9).
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