Natural justice in income-tax appeals requires a fair hearing; ex parte dismissal was set aside and remanded for fresh adjudication.

An ex parte dismissal of a first appeal was held vulnerable where the assessee's non-appearance was explained as accidental and undeliberate, because section 250 of the Income-tax Act requires a fair opportunity to place supporting material before the first appellate authority. The absence of effective participation was treated as sufficient cause, and deciding the matter without relevant evidence was found inconsistent with natural justice. The ex parte appellate order was therefore set aside and the matter remitted for fresh adjudication after granting effective opportunity to the assessee.

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Issues: Whether the ex parte dismissal of the first appeal and the consequent assessment needed to be set aside for denial of reasonable opportunity and violation of natural justice.

Analysis: The appeal was disposed of ex parte by the first appellate authority after repeated non-appearance, but the record showed that the non-compliance was explained as accidental and undeliberate. The matter arose from an assessment under section 143(3) of the Income-tax Act, 1961, and the appellate stage under section 250 of the Income-tax Act, 1961 required a fair opportunity to place supporting material. In the circumstances, the absence of effective participation before the first appellate authority was treated as sufficient cause, and adjudication without relevant evidence was held inconsistent with natural justice.

Conclusion: The ex parte appellate order was set aside and the matter was remitted to the first appellate authority for fresh adjudication after granting effective opportunities to the assessee.

Ratio Decidendi: A disposal made without affording a fair and effective opportunity to substantiate the claim, where sufficient cause for non-appearance is shown, is vulnerable to being set aside and remitted for fresh decision in accordance with law.

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