Fair opportunity on statutory exception required before adverse tax determination; matter remanded for fresh consideration.

An adverse determination based on a statutory exception cannot be sustained unless the assessee is given a fair opportunity to meet that issue. Here, the Tribunal moved from the deduction claim under section 80P(2)(a)(i) to section 80P(4) and its Explanation without first allowing the assessee to place material and submissions on that exception. The appropriate course was remand for fresh consideration so the applicability of section 80P(4) could be examined after hearing the assessee. The matter was therefore sent back for de novo adjudication, with all contentions left open before the Assessing Officer.

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Issues: Whether the matter required remand because the Tribunal applied section 80P(4) of the Income-tax Act, 1961 without affording the assessee an opportunity to meet that issue.

Analysis: The controversy before the authorities had proceeded on the assessee's claim for deduction under section 80P(2)(a)(i). The Tribunal, however, shifted the basis of decision to section 80P(4) and the Explanation thereto. In the circumstances, the assessee ought to have been given an opportunity to place material and contentions on the applicability of the exception provision before an adverse conclusion was drawn. The appellate determination was therefore not sustainable without such opportunity, and the proper course was to remit the matter for reconsideration.

Conclusion: The matter was rightly remanded for fresh consideration after giving the assessee an opportunity to address the applicability of section 80P(4) and its Explanation.

Final Conclusion: The appeals succeeded to the extent that the impugned orders were set aside and the matter was sent back for de novo examination, leaving the parties free to urge all contentions before the Assessing Officer.

Ratio Decidendi: An adverse determination based on a statutory exception cannot be sustained where the assessee was not given a fair opportunity to meet that issue; in such a case, remand for fresh adjudication is warranted.

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