Natural justice and speaking order requirements led to setting aside an assessment that ignored submitted documents and denied hearing.

An assessment order was found unsustainable where the assessee had produced supporting declaration forms and documents, but the order ignored that material and was passed without personal hearing. The non-speaking, unexplained order was treated as arbitrary and contrary to natural justice. The assessment was set aside, and the matter was remitted for fresh notice, personal hearing, examination of the documents, and a speaking order on merits in accordance with law. Direction was also issued for disciplinary action against the concerned officer.

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Issues: Whether the assessment order was liable to be quashed for violation of principles of natural justice and for being a non-speaking order, and what consequential direction should follow.

Analysis: The impugned assessment proceeded on the footing that the assessee had not furnished supporting declaration forms and documents, but the record showed that documents had been produced and received. No personal hearing was granted, and the order did not discuss the materials submitted by the assessee. Such an order was held to reflect arbitrary exercise of power and failure to comply with the requirement of a reasoned decision after considering the assessee's explanation and documents.

Conclusion: The assessment order was set aside. The matter was directed to be taken up by a competent officer, fresh notice and personal hearing were to be given, the documents were to be examined, and a speaking order on merits and in accordance with law was to be passed. The direction for disciplinary action against the concerned officer was also issued.

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