Natural justice in reassessment requires disclosure of adverse material and a fair chance to rebut before fresh assessment.

A reassessment based on adverse material gathered from another assessing officer, without furnishing that material to the assessee or allowing an effective rebuttal, was held to violate natural justice. The earlier remand directions required the authority to call for records, consider the assessee's submissions, conduct an enquiry, and pass a fresh order after hearing the assessee. As those directions were not properly followed and the undisclosed material was used against the assessee, the reassessment could not be sustained and was set aside. The matter was remanded for fresh assessment after disclosure of the information and an opportunity to respond.

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Issues: Whether the reassessment order could be sustained when the authority relied on materials collected from another assessing officer without furnishing them to the assessee or granting an effective opportunity of rebuttal, and whether the matter required fresh consideration in compliance with the earlier remand directions.

Analysis: The assessment had earlier been remanded with directions to call for the relevant records, consider the assessee's application and supporting documents, conduct an enquiry, and pass fresh orders after giving an opportunity of hearing. In the impugned proceedings, the authority gathered information from the other assessing officer and used those materials against the assessee, but did not furnish the same to the assessee or allow objections before concluding the matter. Such a procedure violated the principles of natural justice, since adverse material used in decision-making must be disclosed and the affected party must be given a fair chance to meet it.

Conclusion: The reassessment order could not be sustained and had to be set aside. The matter was remanded for fresh assessment after supplying the collected information and granting the assessee an opportunity to respond.

Final Conclusion: The assessment was invalid for breach of natural justice and non-compliance with the earlier directions, and the authority was required to redo the exercise after hearing the assessee.

Ratio Decidendi: An assessment based on undisclosed adverse material, without furnishing the material to the assessee and without giving an effective opportunity of rebuttal, is vitiated by breach of natural justice and cannot stand.

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