Reasonable opportunity of hearing required before assessment order; inadequate notice time led to setting aside and remand.

An assessment order cannot be sustained where the assessee is denied a fair and reasonable opportunity to respond to a Section 142(1) notice and show-cause notice. Here, the notices allowed only a very short response time, including about one hour for the show-cause notice, so the assessee was not given meaningful hearing to support the return. The assessment order was therefore set aside and the matter remitted for fresh notice and reconsideration, with at least seven days' time to respond.

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Issues: Whether the assessment order could be sustained when the assessee was given inadequate time to respond to the notice and show-cause notice.

Analysis: The notice under Section 142(1) of the Income-tax Act, 1961 was issued with very short time to respond, and the subsequent show-cause notice also afforded only about one hour. In these circumstances, the assessee was not given a fair and reasonable opportunity to place materials in support of the return. The record showed non-compliance with the requirement of meaningful hearing before passing the assessment order.

Conclusion: The assessment order was set aside and the matter was remitted to the authority to issue fresh notice and afford at least seven days' time to respond before taking a fresh decision in accordance with law.

Ratio Decidendi: An assessment order passed without granting a reasonable opportunity of hearing is liable to be set aside and remitted for fresh consideration.

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