Natural justice required fresh adjudication of unexplained cash credits and expense disallowance after ex parte assessment.

Additions for unexplained cash credits and disallowance of expenses were not sustained on merits because the assessment was completed ex parte and the appellate order was not reasoned. Since the issues had not been decided after affording a reasonable opportunity of hearing, the principles of natural justice required fresh consideration. The matter was therefore restored to the Commissioner (Appeals) for a de novo decision after calling for a remand report and giving the assessee an opportunity to be heard.

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Issues: Whether the additions relating to unexplained cash credits and disallowance of expenses should be set aside and restored to the appellate authority for fresh adjudication.

Analysis: The assessment had been completed ex parte under section 144, and the appellate order was also not reasoned on merits. As the authorities below had not decided the issues after granting a reasonable opportunity of hearing, and in view of the principles of natural justice, the matter required fresh consideration.

Conclusion: The issues were restored to the Commissioner (Appeals) for fresh decision after calling for a remand report and affording the assessee a reasonable opportunity of being heard.

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