Personal hearing under Section 144B is mandatory when sought; denial vitiates the assessment and remand follows.

Section 144B confers a vested right to a reasonable personal hearing when an assessee seeks one before finalisation of an assessment with civil consequences, and the word "may" does not make that safeguard discretionary. The Court rejected the distinction that oral hearing could be denied in disputed factual matters, holding that refusal of hearing was contrary to law. The assessment order and consequential proceedings were quashed, and the matter was remanded for fresh decision after granting hearing in accordance with law.

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Issues: Whether an assessee is entitled to a personal hearing under Section 144B of the Income-tax Act, 1961 before finalisation of the assessment order, and whether denial of such hearing vitiates the assessment order and consequent proceedings.

Analysis: The Court held that the use of the expression "may" in Section 144B(7) does not make the grant of personal hearing discretionary where the assessment order has civil consequences. It affirmed that an assessee has a vested right to a reasonable opportunity of personal hearing when sought, and the earlier view rejecting a distinction between disputed questions of fact and questions of law was relied upon as unsustainable. On the facts, the refusal to grant oral hearing while proceeding to complete the assessment was contrary to law.

Conclusion: Denial of personal hearing vitiated the assessment proceedings; the assessment order and consequential proceedings were quashed and the matter was remanded for fresh decision after granting hearing in accordance with law.

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