Rectification grievance from return records must be examined on merits and decided by a reasoned speaking order after hearing the assessee.

Where the alleged rectification error is apparent from the return and accompanying records, the appellate authority must examine the grievance on merits and pass a reasoned speaking order after hearing the assessee. The return and computation already disclosed the capital gains working and the claim under section 54EC, so the challenge could not be rejected summarily as outside rectification without considering those materials. The appellate order was therefore set aside and the matter remanded for de novo adjudication with an opportunity of hearing.

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Issues: Whether the appellate authority was justified in declining to examine the rectification grievance arising from the processing of the return and in not passing a speaking order on the assessee's claim relating to computation of capital gains and deduction under section 54EC.

Analysis: The return and the accompanying computation disclosed the capital gains working and the claim under section 54EC. The rectification application and the appellate challenge were based on material already available in the return, yet the appellate authority disposed of the matter without examining those facts and without giving reasons. Since the grievance arose from the return itself and the supporting documents, the matter required consideration on merits rather than a bare rejection as beyond the scope of rectification.

Conclusion: The appellate order was set aside and the matter was remanded to the appellate authority for denovo adjudication after granting an opportunity of hearing to the assessee.

Final Conclusion: The assessee succeeded to the extent of obtaining remand for fresh consideration, and the appeal was allowed for statistical purposes.

Ratio Decidendi: Where the alleged rectification error is demonstrable from the return and accompanying records, the appellate authority must examine the grievance on merits and pass a reasoned order after hearing the assessee.

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