Natural justice in assessment revision requires disclosure of adverse material and a personal hearing before finalisation

A revision of assessment based on an uncommunicated deviation proposal was held unsustainable because the assessee was not furnished the adverse material relied on by the assessing authority before finalisation. Fairness required disclosure of that material and an effective opportunity to rebut it, including a personal hearing. The availability of an appellate remedy did not cure the breach of natural justice. The assessment revision was therefore set aside and the matter remitted for fresh consideration after supplying the deviation proposal and hearing objections.

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Issues: Whether the revision of assessment based on an uncommunicated deviation proposal and without affording a personal hearing was sustainable.

Analysis: The assessment order was founded on the rejection of the deviation proposal and the materials recorded therein, but those materials were not furnished to the assessee before finalisation of the assessment. Where the assessing authority relies upon adverse material, fairness requires disclosure of that material and an opportunity to rebut it. The absence of a personal hearing further vitiated the proceedings. The availability of an appellate remedy did not bar interference where the impugned order suffered from violation of natural justice.

Conclusion: The revision of assessment was unsustainable and was liable to be set aside, with a direction for fresh consideration after furnishing the deviation proposal and granting opportunity of objection and personal hearing.

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