Duty to disclose basis of adverse departmental information requires communicating particulars so an assessee can rebut; non-disclosure vitiates assessment.

Use of comparative yields derived from other millers without disclosing the basis or particulars denied the assessee a fair opportunity to rebut adverse material; where private or departmental information is relied upon to form an adverse conclusion, the substance or sufficient particulars must be communicated so the assessee can explain or rebut, and reliance on confidential sources does not eliminate that duty. Appellate acceptance of the departmental basis does not cure failure to afford particulars. Outcome: the assessee was not apprised of the basis nor given a reasonable opportunity to rebut, and the petition was allowed with costs.

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Issues: Whether the Income Tax Officer indicated to the assessee the basis of the average yield relied upon (derived from other millers) and whether the assessee was given a reasonable opportunity to adduce evidence in rebuttal of that basis.

Analysis: The assessment relied on a comparison between the assessee's yields and yields said to be shown by other merchants, without record or notice identifying the basis of that comparison. Where private or departmental information is used to form an adverse conclusion against an assessee, the substance of such information or sufficient particulars enabling the assessee to meet it must be communicated so that the assessee has a fair opportunity to explain or rebut the material on which an assessment is proposed. Reliance on confidential sources does not eliminate the duty to give the assessee adequate particulars of the case to be met; appellate orders that accept the departmental basis without indicating that such opportunity was afforded do not cure the deficiency.

Conclusion: The question is answered in the negative; the assessee was not apprised of the basis of the comparative yields nor given a reasonable opportunity to rebut that basis, and the petition is allowed with costs.

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