Fair hearing and speaking orders required for ex parte assessment and penalty matters before fresh adjudication.

Assessment completed ex parte under section 144 and penalty additions under sections 271(1)(b) and 271(1)(c) were found to have been sustained without full consideration of the assessee's clarifications or proper speaking reasons. Emphasising substantial justice and the need for a fair opportunity of hearing, the matter was restored to the Assessing Officer for fresh adjudication. The assessee was to be given due opportunity to present its case, and the assessment as well as penalty issues were to be reconsidered afresh on that basis.

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Issues: Whether the assessment and penalty additions sustained by the first appellate authority required interference and restoration for fresh adjudication in view of lack of proper consideration and opportunity.

Analysis: The matter arose from an assessment completed ex parte under section 144 and penalties sustained under sections 271(1)(b) and 271(1)(c) of the Income-tax Act, 1961. The order noted that the authorities below had not passed fully speaking orders and that the assessee's clarifications were not properly examined. In the interests of substantial justice, and to ensure a fair opportunity of hearing, the matter was considered fit to be sent back to the Assessing Officer for reconsideration.

Conclusion: The assessment and penalty matters were restored to the Assessing Officer for fresh adjudication after granting the assessee due opportunity of hearing.

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