Audi alteram partem in appellate tax proceedings: material gathered by the Commissioner cannot be ignored without hearing the assessee.

The Tribunal could not exclude and ignore material collected by the Commissioner of Income-tax (Appeals) under section 250(4) without first giving the assessee an opportunity to meet that material. Since the documents were not properly confronted, the Tribunal was not justified in reversing the appellate finding and restoring the assessment order on that basis. The proper course was to remit the matter to the Commissioner of Income-tax (Appeals) for reconsideration after hearing the assessee. The result was in favour of the assessee.

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Issues: Whether the Tribunal was justified in excluding and ignoring material collected by the Commissioner of Income-tax (Appeals) under section 250(4) of the Income-tax Act, 1961, and in reversing the appellate finding without affording the assessee an opportunity of hearing on that material.

Analysis: The material relied upon by the Commissioner of Income-tax (Appeals) had not been confronted to the assessee in the manner required before it was excluded from consideration. The Tribunal, instead of deciding the matter on a proper opportunity to meet that material, proceeded to ignore it and restore the assessment order. Such a course was not justified, because the assessee was entitled to be heard on the question of exclusion and use of those documents. The proper course was to remit the matter to the Commissioner of Income-tax (Appeals) for reconsideration after hearing the assessee.

Conclusion: The Tribunal was not justified in ignoring the material without hearing the assessee, and the matter ought to have been remitted. The answer is in favour of the assessee.

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