Validity of assessment based on CBEC import data challenged; relief ordered to remand for full disclosure and reconsideration.

Challenge to an income-tax assessment founded on third-party CBEC import data: the article emphasises that relying solely on aggregate import figures without furnishing the breakup or underlying import bills to the assessee violated principles of natural justice, vitiating the addition under the Act; accordingly the assessment demand is unsustainable and the matter is remanded for fresh consideration after full disclosure. The note further observes that the purchases had been examined under transfer pricing and found at arm's length, which undercuts reliance on unexplained CBEC aggregates as standalone material for additions.

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Issues: Whether the assessment order dated 29th September 2023 (passed under Section 143(3) read with Section 144B) and the demand notice dated 29th September 2023 were vitiated by violation of the principles of natural justice by failing to disclose the detailed break-up of import data received from CBEC, and whether the assessment should be quashed and remanded for fresh consideration with directions to provide particulars and an opportunity of hearing.

Analysis: The impugned proceedings relied upon aggregate import figures communicated by CBEC without disclosing the breakup or underlying documents to the Petitioner. The Petitioner repeatedly sought the detailed data on which the alleged variation was computed and submitted partial reconciliations based on the limited information available. Notices issued to the Petitioner set out only aggregate figures and did not furnish the CBEC information or a detailed breakout enabling meaningful reconciliation. The assessing authority proceeded to make an addition under Sections 69/69A without providing the material relied upon, without affording a personal hearing after furnishing particulars, and without a speaking order addressing the Petitioner's submissions. Prior transfer-pricing scrutiny accepted the purchase values; yet the assessment relied on undisclosed aggregate data. Procedural safeguards in faceless assessment and the requirements of a show cause notice and adequate opportunity to rebut relied-upon material were not complied with, making it impossible for the Petitioner to effectively discharge its burden to reconcile or explain the alleged discrepancy.

Conclusion: The assessment order dated 29th September 2023 and the demand notice dated 29th September 2023 are quashed and set aside on the ground of violation of the principles of natural justice. The matter is remanded to the assessing authority to issue a fresh show cause notice specifying the legal provisions for any proposed addition, to provide the detailed break-up and copies of the information received from CBEC, to grant at least 15 working days to reply, to afford a personal hearing, to give not less than 7 days' notice before relying on any decision, and to pass a speaking assessment order addressing the Petitioner's submissions on or before 31st March 2026.

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