Tribunal invalidates revisional order for breaching natural justice principles

The tribunal invalidated the revisional order as it went beyond the show cause notice, breaching principles of natural justice by introducing unnotified grounds. The Assessing Officer's inquiry into the expenses claim adequacy was deemed factual and not a legal question, leading to the rejection of the appeal on this issue.

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Issues involved: Validity of revisional order beyond scope of show cause notice, breach of principles of natural justice, adequacy of inquiry by Assessing Officer regarding expenses claim.

Validity of revisional order: The tribunal found the revisional order invalid as it exceeded the scope of the show cause notice, incorporating grounds not mentioned in the notice. The tribunal held that this breached principles of natural justice, as the assessee was not given the opportunity to respond to these additional grounds. The requirement of a show cause notice allows the party to present their point of view on the grounds considered for the order. Since additional grounds not in the notice formed the basis of the revisional order, the tribunal was justified in setting it aside.

Adequacy of inquiry by Assessing Officer: The second issue raised was whether the Assessing Officer conducted sufficient inquiries regarding the assessee's claim of expenses in the re-revised return of income. The tribunal questioned if further examinations were needed after the assessee's statement that the expenses were for security purposes and paid from available cash balance. However, the adequacy of inquiry is a question of fact, not law. Therefore, the appeal on this matter was rejected as it cannot be entertained.

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