Natural justice in assessment requires supply of relied-upon material before adverse conclusions are drawn.

An assessment based on search material, a screenshot and other corroborative evidence was vitiated because the assessee was not shown to have received the underlying documents, statements or relied-upon material for rebuttal. The record did not establish that such material had been supplied before adverse conclusions were drawn. A quasi-judicial assessment must afford a fair opportunity to meet the case, and withholding relied-upon material breaches natural justice and renders the proceeding legally unsustainable. The assessment order was therefore liable to be quashed, and the consequential proceedings did not survive.

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Issues: Whether the assessment order was liable to be quashed for violation of principles of natural justice on account of non-supply of the material and information relied upon by the Assessing Officer.

Analysis: The addition was founded on material said to have been gathered during search and on a screenshot and other corroborative material relied upon in the assessment order. The assessee was not shown to have been furnished with the underlying documents, statements, or other relied-upon material, and the record did not establish that such material had been shared for rebuttal. A quasi-judicial assessment cannot be sustained where adverse conclusions are drawn on the basis of material withheld from the assessee, because denial of a fair opportunity to meet the case strikes at the very legality of the proceedings.

Conclusion: The assessment order was held to be vitiated and liable to be quashed for breach of natural justice.

Final Conclusion: The appeal succeeded and the consequential proceedings did not survive.

Ratio Decidendi: An assessment based on material not supplied to the assessee, thereby denying a fair opportunity of rebuttal, is legally unsustainable and vitiated by breach of natural justice.

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