Personal hearing before rectification decision is mandatory; order quashed and matter remanded for fresh adjudication.

An order rejecting a rectification application under the Income-tax Act was quashed because the authority failed to comply with a prior direction to grant a personal hearing before deciding the matter. Although notice was issued and information was called for, no effective hearing date was fixed and the application was decided without the mandated opportunity. The High Court held the order unsustainable and remanded the matter for fresh decision after hearing the petitioner.

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Issues: Whether the order rejecting the rectification application under Section 154 of the Income-tax Act, 1961, was liable to be quashed for want of opportunity of hearing and whether the matter required remand for fresh decision.

Analysis: The petitioner had earlier been directed to be afforded an opportunity of personal hearing before the rectification application was decided. The record showed that although notice was issued and materials were called for, no effective date was fixed for hearing and the application was decided thereafter. In these circumstances, the authority did not comply with the earlier direction to hear the petitioner before passing the order.

Conclusion: The impugned order was held unsustainable, quashed and set aside, and the matter was remanded to the authority for a fresh decision after hearing the petitioner.

Final Conclusion: The petitioner succeeded in securing annulment of the rejection order, with the dispute sent back for reconsideration on merits after affording hearing.

Ratio Decidendi: An order passed in disregard of a binding direction to grant a personal hearing before decision-making cannot be sustained and is liable to be quashed with remand for fresh adjudication.

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