Independent assessment and meaningful hearing are required before restricting exemption or confirming enforcement proposals.

An assessing authority must independently examine objections and supporting documents, apply its own mind, and give a meaningful personal hearing before confirming an enforcement wing proposal or restricting exemption. Where the assessment order merely rejects objections on the basis that no documents were produced, without addressing the taxpayer's explanation or recording reasons for any ad hoc restriction, the order is unsustainable. The Madras HC therefore set aside the assessment orders, allowed the writ petitions, and remitted the matters for fresh consideration with a personal hearing and a reasoned decision on merits.

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Issues: Whether the assessment orders could be sustained when the assessing authority allegedly failed to grant an effective personal hearing, did not independently consider the objections and documents, and confirmed the enforcement wing proposal by making an ad hoc restriction of exemption.

Analysis: The assessment was assailed on the ground that the petitioner's objections were not properly considered and that the orders were passed without a meaningful opportunity of hearing. The authority's stand that a personal hearing had been granted was noted, but the reasoning in the assessment order showed that the objections were rejected mainly on the footing that no documents were produced. The Court found that the show cause material itself reflected the petitioner's explanation and that the enforcement wing had proceeded on a partial acceptance of the petitioner's case with a 50% restriction. It was held that an assessing authority must act independently, apply its own mind to the objections and documents, and record reasons justifying any restriction on exemption, rather than merely confirming the enforcement wing proposal.

Conclusion: The assessment orders could not be sustained and the writ petitions were allowed. The matters were remitted for fresh consideration with an opportunity of personal hearing and a reasoned decision on merits.

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