Fresh assessment restored where disputed payments and tax deduction at source issues were not properly examined

Insufficient representation before the Assessing Officer and an ineffective opportunity during remand justified fresh examination, because the audit report and surrounding material did not conclusively show that the disputed payments were outside-party payments attracting tax deduction at source. The CIT(A) order was set aside and the matter was restored to the Assessing Officer for de novo assessment after considering the material and granting a reasonable opportunity of hearing. No view was expressed on the merits.

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Issues: Whether the assessment and the disallowance required interference and whether the matter should be restored for a fresh assessment in view of the assessee's claim that relevant material was not properly considered.

Analysis: The record showed that the assessee had not been properly represented before the Assessing Officer and that proper opportunity was not effectively made available even during remand proceedings. The audit report and the surrounding details did not conclusively establish that the disputed payments were necessarily payments to outside parties attracting tax deduction at source. In these circumstances, the matter needed fresh examination by the Assessing Officer after considering the material and granting a reasonable opportunity of hearing.

Conclusion: The order of the CIT(A) was set aside and the matter was restored to the Assessing Officer for de novo assessment. No opinion was expressed on the merits.

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