Natural justice in reassessment: undisclosed sale transaction and audit material made the order unsustainable and remittable.

A reassessment order could not be sustained where the alleged sale transaction and audit-based material were introduced for the first time in the final order without being furnished to the assessee earlier. The court treated this non-disclosure as a breach of natural justice because the assessee was denied a meaningful opportunity to rebut the proposed demand. The defect was held to go to the root of the adjudication rather than amounting to a mere irregularity. The reassessment order was quashed and the matter remitted for fresh consideration after supplying the relevant particulars and granting a hearing.

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Issues: Whether the reassessment order could be sustained when the basis for the demand, particularly the alleged sale transaction and the material relied on, was not furnished to the assessee before finalisation of the order, resulting in breach of natural justice.

Analysis: The impugned order introduced, for the first time, a specific sale transaction and relied upon audit-based allegations without placing the relevant particulars before the assessee earlier. The order therefore proceeded on material that had not been disclosed for effective rebuttal. In such circumstances, the assessee was denied a meaningful opportunity to explain the transaction and meet the proposed demand. The defect went to the root of the adjudication and could not be treated as a mere irregularity.

Conclusion: The reassessment order was held unsustainable for violation of natural justice and was quashed. The matter was remitted for fresh consideration after furnishing the relevant details and granting hearing to the assessee.

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