Natural justice mandates disclosure of assessment materials to the assessee before determination.

1 On 16-9-1955 we passed the following order:
ORDER
"This is a reference by the Income Tax Appellate Tribunal, Madras 'B' Bench, in compliance with a requisition under S.66(2) of the Indian Income Tax Act, 1922. The assessee is an unregistered firm consisting of five partners and carrying on business in cocoanut oil at Alleppey under the name and style of 'Swamy Brothers'.
The assessment concerned is the assessment for the year 1124 M.E. (accounting period 1123 M.E.). It was made under S.30(4) of the Travancore Income Tax Act, 1121, corresponding to S.23(4) of the Indian Income Tax Act, 1922; and the question that we have to determine is:
"Whether there was material for the Tribunal to reject the book results and estimate the income from cocoanut oil and empty tins in the manner it has done?"
"2. According to the assessee the business was nothing more than a commission agency business from which the firm derived a commission of 0.75 per cent. (12 annas per Rs. 100) of the turnover. The Income Tax Officer declined to accept this contention and held that the firm's business cannot be considered as a commission agency business, pure and simple, and estimated the gross profit at 2.75 per cent. of the turnover.
"3. The matter was taken up in appeal before the Appellate Assistant Commissioner of Income Tax, Trivandrum, as Income Tax Appeal No. 513/51-52 and before the Income Tax Appellate Tribunal, Madras 'B' Bench, as I.T.A. No. 6483 of 1952-53. The Appellate Assistant Commissioner by an order dated 10-12-1952 and the Appellate Tribunal by an order dated 30-6-1953 rejected the contention of the assessee and upheld the estimate of the gross profit at 2.75 per cent, of the turnover.
"4. Learned counsel for the assessee agrees that we may proceed on the basis that the assessee was not a commission agent, pure and simple, and that an estimate of the gross profit at a percentage higher than 0.75 per cent. of the turnover is possible in this case. His only contention is that there was no material before the Tribunal for the estimate that has been made, viz., the estimate of the gross profits at 2.75 per cent, of the turnover.
"5. It is clear from the order of the Tribunal that it based its conclusion on the proportion that the gross profits bore to the turnover in the case of other assessees:
'the case has to depend upon comparable, cases. The departmental representative brought to our notice comparable cases which showed gross profit varying between 3 to 4 per cent. In estimating the gross income the Income Tax Officer adopted 2.75 per cent, and after deducting 0.75 per cent, for the commission accounted for in the commission account the addition was restricted to 2 per cent.
In the circumstances of this case where the assessee is not strictly a commission agent the margin of 2 per cent, determined by the departmental officers is not at all excessive. In fact it compares very favourably with the rates disclosed by the other merchants carrying on business under similar circumstances.'
"6. The same was the approach of the Income Tax Officer:
'Another oil dealer who does business on the same lines as assessee has shown a gross profit of 2.9 per cent, on the turnover. I will adopt a gross profit of 2.75 in this case on the admitted sales of cocoanut oil. Assessee has already accounted for a profit of 0.75 in commission account. The balance of 2 per cent. will be worked out on the admitted sales and added back to the admitted income of Rs. 14,931. This is Rs. 56,023.'
"7. According to the learned counsel for the assessee no detail of the cases that were considered to be comparable was ever given to the assessee and in view of that though those cases may be sufficient to provoke a suspicion that 0.75 per cent, is not adequate they cannot possibly be used as materials to sustain an assessment.
In support of his contention he drew our attention to the decision of the Supreme Court in Dhakeswari Cotton Mills v. Commr. of I. T., West Bengal, (1954)