Natural justice in section 143(1)(a) adjustments: prior notice and hearing are required before making an intimation.

Adjustment under section 143(1)(a) was invalid where it was made without the statutorily required prior notice and without giving the assessee an opportunity to meet the proposed adjustment. The procedure breached the requirement of prior intimation and the principle of audi alteram partem. The consequent intimation was quashed as bad in law, and the issue was decided in favour of the assessee.

---

---

Issues: Whether the adjustment made under section 143(1)(a) of the Income-tax Act, 1961, and the consequent intimation, were valid in law when no prior notice or opportunity was given to the assessee.

Analysis: The adjustment was made without issuance of the statutorily required notice before making the adjustment. The record also showed that the assessee was not afforded an opportunity to meet the proposed adjustment. In such circumstances, the proceedings offended the requirement of prior intimation and the principles of natural justice, including audi alteram partem.

Conclusion: The adjustment and intimation were held to be bad in law and were quashed. The issue was decided in favour of the assessee.

---