Bona fide accounting method required fresh assessment and effective hearing before final adjudication of tax liability.

The assessment orders were set aside because a material issue affecting the assessment had not been specifically examined, including whether the assessee's method of accounting was bona fide. The Court required the assessment to be reopened and decided afresh in light of its earlier directions, the statement recorded on 17.07.2009, and the assessee's explanation and supporting materials. As the assessee had been given an opportunity to object and a final notice had already been issued, the matter was remanded to the Assessing Authority for fresh adjudication on all issues after affording an effective hearing.

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Issues: Whether the assessment orders were liable to be set aside and the matter remanded for fresh consideration, including the question whether the method of accounting followed by the assessee was bona fide.

Analysis: The assessment had to be completed afresh in the light of the earlier directions of the Court and the materials arising from the statement recorded on 17.07.2009. The bona fides of the method of accounting was not a peripheral matter but a substantive issue directly affecting the assessment. Since the assessee had been given an opportunity to place objections and the officer had issued a final notice, the matter required a fresh decision on merits with specific consideration of the assessee's explanation and supporting materials.

Conclusion: The impugned assessment orders were set aside and the matter was remanded to the Assessing Authority for fresh adjudication after hearing the assessee on all issues, including the bona fides of the accounting method.

Ratio Decidendi: Where a material issue affecting the assessment remains to be specifically examined, the assessment must be reopened and decided afresh after affording the assessee an effective hearing.

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