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Issues:
1. Justification of canceling the assessment and deleting the addition without further inquiry by the Tribunal. 2. Whether the Tribunal should have remitted the case for a de novo consideration. Analysis: The judgment of the High Court of Kerala pertains to a reference made by the Commissioner of Income-tax regarding an assessment year of 1982-83. The assessee, a non-resident, had purchased immovable properties during the relevant year for Rs. 4,76,000. The Income-tax Officer initiated proceedings under section 147 of the Income-tax Act, as the assessee did not comply with the notice under section 148. Subsequently, an ex parte assessment was completed estimating the income at Rs. 6,00,000, which was confirmed by the Commissioner of Income-tax (Appeals). The assessee appealed to the Tribunal, arguing that the assessment lacked material connecting the investments to any unexplained source of funds and highlighted the wealth-tax assessment for the previous year. The Tribunal found the assessment to be arbitrary and lacking evidence to support undisclosed personal expenditure, leading to the annulment of the assessment. In the judgment, the court considered the contentions of both parties. The standing counsel for the applicant argued that the Tribunal erred in annulling the assessment, citing a Supreme Court decision to support the ex parte assessment. Alternatively, it was contended that if the Tribunal found merit in the assessee's contentions, the matter should have been remitted for fresh consideration, not annulled directly. On the other hand, the counsel for the assessee presented evidence of the wealth-tax assessment and subsequent income-tax returns filed, asserting that the assessment treating the assessee as a resident was not legally sustainable. The court opined that the Tribunal should have remitted the case for fresh consideration instead of annulling the assessment directly. Consequently, the court answered all questions in favor of the Revenue and against the assessee, emphasizing the need for a remittal for fresh assessment. In conclusion, the court directed the Tribunal to set aside the order passed by the first appellate authority and remit the matter to the assessing authority for a fresh consideration, highlighting the importance of due process in tax assessments.
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