Personal hearing and effective appellate adjudication required before resolving objections to processing adjustments and TDS credit claims.

Failure to grant a requested personal hearing and to adjudicate objections to a processing adjustment under Section 143(1) undermines the effective opportunity required under Section 250 and principles of natural justice. The appellate authority had directed verification of the buyer's subsequent TDS compliance but did not address whether the adjustment was within the permissible scope of Section 143(1). The matter was therefore remitted for fresh adjudication after granting an effective opportunity and personal hearing, without any view on the merits of the TDS credit dispute.

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Issues: Whether the appellate order was vitiated for failure to grant the assessee a personal hearing and for not properly adjudicating the grounds raised against the adjustment made in processing under Section 143(1) of the Income-tax Act, 1961.

Analysis: The appeal was examined primarily on the grievance that despite a specific request, no personal hearing was granted in the appellate proceedings. The order also did not adjudicate the contention regarding whether the CPC adjustment fell within the permissible scope of Section 143(1) of the Income-tax Act, 1961. The appellate authority had merely directed verification of subsequent TDS compliance by the buyer, while the assessee's complaint remained that legal and factual submissions were not effectively heard. In that background, the requirement of effective opportunity under Section 250 of the Income-tax Act, 1961 and the principles of natural justice assumed central importance. As the request for personal hearing was undisputedly not granted, the appellate order stood vitiated and the matter required fresh consideration without expressing any view on the merits of the TDS credit dispute.

Conclusion: The issue was decided in favour of the assessee to the extent that the appellate order was set aside and the matter was remitted to the Commissioner (Appeals) for fresh adjudication after granting effective opportunity and personal hearing.

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