Right to be heard: appellate order vitiated where no hearing; matter remitted for fresh adjudication after proper hearing.

The central issue is denial of a proper and reasonable opportunity of hearing before an appellate officer. The Tribunal applied the principle that adverse findings cannot be sustained where the assessee or its authorised representative was not heard, concluding that such procedural defect vitiates the appellate order. Rather than adjudicating substantive merits, the Tribunal set aside the CIT(A)'s order and remitted the matters for fresh consideration with a direction to afford the assessee a proper hearing. The appeal was allowed for statistical purposes and the file returned to the CIT(A) for fresh adjudication on merits.

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Issues: Whether the Commissioner of Income Tax (Appeals) erred in deciding the appeal without giving the assessee a proper and reasonable opportunity of being heard, and whether the CIT(A)'s order should be set aside and the matters remitted for fresh decision after affording opportunity of hearing.

Analysis: The Tribunal examined the record of proceedings before the CIT(A) and found that the CIT(A) proceeded to decide the controversy in the absence of the assessee/its authorised representative and without providing a proper and reasonable opportunity of being heard. The Tribunal noted the legal principle that a party must be afforded an opportunity of hearing before adverse findings are recorded and relied on precedent establishing that absence of such opportunity vitiates the order. In view of this defect the Tribunal did not decide the substantive merits itself but considered it appropriate in the interests of justice to set aside the CIT(A)'s findings and remit the issues for fresh consideration by the CIT(A) after giving the assessee a proper hearing.

Conclusion: The CIT(A)'s order is set aside on the ground of failure to provide a proper and reasonable opportunity of hearing; the matters are remitted to the file of the CIT(A) for fresh adjudication on merits after affording opportunity of hearing to the assessee. The appeal is allowed for statistical purposes.

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