Assessment set aside for lack of hearing and failure to quantify proposed addition before completion of enquiry

Proper opportunity of hearing and quantification of the proposed addition were treated as necessary before completing assessment, where the taxpayer had already filed explanations and supporting material but sought further time to produce additional records. The assessment was completed on the basis that primary evidence, confirmations, and complete documentation were not furnished. The assessment order and consequential notices were set aside, and the matter was remitted to the enquiry stage under Section 143(2) of the Income-tax Act, 1961, with all contentions kept open for fresh consideration.

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Issues: Whether the assessment order and consequential notices were liable to be set aside for want of a proper opportunity of hearing and for failure to quantify the proposed addition before completion of assessment.

Analysis: The petitioner had furnished explanations and supporting material on freight inward expenses and rearing charges, and had sought further opportunity to produce additional records. The assessment was completed on the basis that primary evidence, confirmations, and complete documentation were not produced. In the circumstances, the need to quantify the proposed addition and to afford a personal hearing before concluding the assessment was considered necessary, particularly in view of the factual material required to be examined.

Conclusion: The assessment order and the consequential notices were set aside, and the matter was remitted to the stage of enquiry under Section 143(2) of the Income-tax Act, 1961.

Final Conclusion: The assessee obtained a remand for fresh enquiry with all contentions kept open.

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