Natural justice in reassessment proceedings requires adequate hearing before adjudication is finalised

Insufficient time to respond to notices issued during reassessment proceedings was treated as denial of a reasonable opportunity of hearing, offending the principles of natural justice. The assessment and appellate orders were set aside, and the matter was sent back for fresh adjudication with proper opportunity to the assessee and a speaking order. The stated result was remand for de novo consideration, with the appeal allowed for statistical purposes.

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Issues: Whether the assessment deserved to be set aside and remitted for fresh adjudication on the ground that the assessee was not afforded adequate opportunity of hearing.

Analysis: The notice under section 147 of the Income-tax Act, 1961 was issued and the assessment was completed within a short span after notices under sections 143(2) and 142(1) of the Income-tax Act, 1961. The assessee had not complied, but the available time to respond was found to be insufficient. The denial of a reasonable opportunity of being heard was held to offend the principles of natural justice, and the interests of justice required a fresh consideration with proper opportunity and a speaking order.

Conclusion: The assessment order and the appellate order were set aside and the matter was remitted to the Assessing Officer for de novo adjudication after granting due opportunity of hearing; the appeal was allowed for statistical purposes.

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