Effective hearing in reassessment required where property valuation dispute was not properly considered, leading to remand for fresh decision.

A reopened assessment under the Income-tax Act was found to have been made without properly examining a material property valuation dispute, including the relevant guideline value and the assessee's claim regarding the correct locality. The Madras High Court held that the faceless assessment process did not cure the failure to consider these materials, and that the assessee had to be given an effective opportunity to place supporting records and be heard. The assessment order was quashed, and the matter was sent back for fresh consideration on merits after granting personal hearing and permitting submission of documents.

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Issues: Whether the reassessment order was liable to be quashed for denial of personal hearing and failure to consider the correct guideline value, and whether the matter required fresh consideration after affording an opportunity to the assessee.

Analysis: The assessment had been reopened under Section 147 of the Income-tax Act, 1961. The dispute turned on valuation of the property and the assessee's request for an opportunity to place materials, including the relevant guideline value, in support of the claim that the property fell in Canal Street and not Gandhi Nagar. The faceless assessment procedure under Section 144B(1) of the Income-tax Act, 1961 was considered, but the record showed that the valuation issue had not been properly examined and the assessee should be given a further opportunity to produce supporting documents and be heard through the prescribed link.

Conclusion: The assessment order was quashed and the matter was directed to be reconsidered after granting personal hearing and permitting the assessee to place records.

Final Conclusion: The assessee succeeded in securing quashing of the impugned assessment and a fresh adjudication on merits after opportunity of hearing.

Ratio Decidendi: Where an assessment is made without properly considering a material valuation dispute, the assessee must be afforded an effective opportunity of hearing and to produce relevant records before a fresh decision is taken.

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