Natural justice bars short notice and unannounced additions in income-tax assessments, leading to quashing and remand.

An assessment under Section 143(3) read with Section 144B may be vitiated if the assessee is given less than two clear days, including a weekend, to reply to a show-cause notice, because such time is insufficient for an effective hearing and breaches natural justice. An addition under Section 69A cannot be sustained when it is introduced in the assessment order without being proposed in the notice, as it travels beyond the scope of the prior opportunity. The impugned assessment and consequential demand were quashed, and the matter was remitted for fresh assessment after adequate hearing.

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Issues: (i) Whether the assessment order passed under Section 143(3) read with Section 144B of the Income-tax Act, 1961 and the consequential demand notice were vitiated for want of reasonable opportunity of hearing and breach of natural justice; (ii) Whether the addition made under Section 69A of the Income-tax Act, 1961 could be sustained when no such addition was proposed in the show-cause notice.

Issue (i): Whether the assessment order passed under Section 143(3) read with Section 144B of the Income-tax Act, 1961 and the consequential demand notice were vitiated for want of reasonable opportunity of hearing and breach of natural justice.

Analysis: The time granted for reply to the show-cause notice was less than two clear days and covered Saturday and Sunday. Such short time was held to be unreasonable and insufficient for an effective response.

Conclusion: The assessment proceedings were vitiated by breach of the principles of natural justice, and the challenge succeeded on this ground.

Issue (ii): Whether the addition made under Section 69A of the Income-tax Act, 1961 could be sustained when no such addition was proposed in the show-cause notice.

Analysis: The show-cause notice proposed only a different addition, whereas the impugned assessment order introduced a substantial addition under Section 69A without prior notice or hearing on that proposal.

Conclusion: The addition under Section 69A was not sustainable, as it travelled beyond the scope of the show-cause notice.

Final Conclusion: The impugned assessment order and consequential demand notice were quashed, and the matter was remitted for a fresh assessment after affording adequate opportunity of hearing within the prescribed time.

Ratio Decidendi: An assessment order cannot be sustained where the assessee is denied a reasonable opportunity of hearing, and an addition made on a ground not proposed in the show-cause notice violates natural justice.

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