S.K. CHANDER, A.M. These cross appeals by assessee and Revenue are directed against order of AAC dt. 19th Aug., 1983, relating to asst. yr. 1981- 82. In first ground of appeal of assessee, there is grievance that assessment has been made by ITO without giving reasonable, sufficient and proper opportunity to appellant for proving his case. other grounds taken up in appeal by assessee are on merits. In appeal of Revenue then relief allowed to assessee by ld. AAC is objected to. These two appeals have been heard by us on preliminary objections of assessee that there was lack of reasonable opportunity of being heard at stages below. revenue, however, contended that AAC has considered this contention taken up before him and rejected it. Therefore, there is no case made out by assessee on this issue. We after careful consideration of rival submission and perusal of orders of authorities below along with relevant papers, find that issue of lack of opportunity has not been disposed off by AAC in accordance with law. We are therefore, setting aside orders of authorities below with direction that assessment be made afresh after affording reasonable opportunity of being heard to assessee in light of observations and directions that we record below. It is now well settled that in income tax proceedings, authorities concerned have to follow principles of natural justice. One of cardinal ingredients of natural justice is that party affected should be made aware of case against him and in order to prove his case reasonable opportunity of being heard should be allowed. Reasonable opportunity inter alia includes reasonable time given after due notice of case to be met by party. Now if action of authorities below is examined, keeping these principles in view, it is clear that authorities below did not follow these principles. assessee one Om Prakash Jain was partner in firm known as M/s Jain Vastra Bhandar and said firm was assessed to tax for asst. yrs. 1976-77 to 1978-79. assessee started his individual cloth business w.e.f. 20th Feb., 1978, under name and style of M/s Jain Cut Piece Stores, Railway Road, Hapur. For asst. yr. 1981-82, he filed return of income showing income of Rs. 12,980 from cloth business. This return was filed in July, 1981 and there is nothing of order sheet of ITO that it is placed on record of 17th Aug., 1981. notice under s. 143(2) was issued for 27th Aug., 1981. On that date, assessee attended with his advocate and produced case book, ledger and purchase vouchers. These were examined. ITO, thereafter on 2 n d Jan., 1982 issued summons some Delhi parties with purpose of verification of purchase made by assessee. On 15th Jan., 1982 as is apparent from order sheet noting, one of Delhi parties attended before ITO and produced books of account. On 20th Jan., 1982, another party from Delhi attended and produced books of account. On 1st Feb., 1982, assessee attended in person in response to notice issued by ITO under s. 142(1) of Act on 29th Jan., 1982 and produced his books of account including cash book and ledger for period 1st April, 1980 to 31st March, 1981. At that point of time, ITO exercising powers under s. 131(3) of Act impounded books of assessee and also recorded his statement. About three weeks thereafter, assessee's counsel Anil Kumar, Advocate was allowed inspection of books of account impounded by ITO. Since assessee had been examined on 1st Feb., 1982 and his statement was recorded about purchases from Delhi parties, counsel for assessee filed written explanation on 8th March, 1982 that purchases which were not recorded in books of account of assessee were of M/s Jain & Company of Hapur. Thereafter, ITO required that accounts of Jain & Company alongwith licence for dealing in cloth business be produced on 9th March, 1982. Thus books of account and other evidence was required on next day of hearing. On 9th March, 1982, assessee explained that one Yusuf, who was partner in firm of Jain & Company had books of account and was not available "for present" as recorded by ITO himself in order sheet nothing No. 12 of 9th March, 1982. ITO, therefore, gave date of 11th March, 1982 for production of accounts of Jain & Company. These were not produced because it was pointed out to ITO that said Yusuf was out of station and Om Prakash Jain was ill. This is recorded by ITO in order sheet. ITO wanted compliance on 15th March, 1982 and according to him there was no compliance with result that he passed assessment order on 16th March, 1982. assessment was completed on total income of Rs. 80,000. As recorded earlier, returned income shown by assessee was Rs. 12,980. To this, ITO added Rs. 35,000 as extra profit on suppressed sales and added further sum of Rs. 32,000 as unexplained investment of suppressed purchases. For coming to these conclusions, he relied upon copies of accounts obtained by him from Delhi parties mentioned supra. These copies of accounts were not put to assessee. These books of these parties were also allowed to be seen or scrutinised by assessee. In other words, from 8th March, 1982, when ITO required books of account of Jain & Company till 16th March, 1982, opportunity given by ITO in first place on on 8th March, 1982 was for compliance on next day and on date of hearing on 9th March, 1982 compliance was required on 11th March, 1982. This shows that on both these occasions ITO did not give to assessee reasonable time for compliance. It is noteworthy that assessment that ITO was processing was for asst. yr. 1981-82 and was not being hit by limitations of 31st March, 1982. However, ITO closed assessment on 16th March, 1982. This apparently shows that case that ITO was making against assessee was neither put across to assessee in accordance with law no reasonable opportunity of being heard was allowed to assessee as required under law. It is noteworthy that ITO did not allow assessee full scope of opportunity of examination of evidence that he had gathered and intended to use against him. When matter came up in appeal before AAC, assessee put first ground as under: "That ld ITO erred in law and on facts in completing assessment without giving reasonable opportunity to appellant to prove his case. ld. ITO has shown undue haste in completing assessment and has failed to give reasonable opportunity to appellant to adduce necessary evidence in support of his case." ground of appeal is, in fact, recorded by ld. AAC in very first para of his impugned order. In his impugned order, it is also recorded that on this point, he referred matter to ITO to justify his action in completing assessment. ld. AAC thereafter disposed off this important issue, which goes to very root of assessment in just four lines as under: "6. Arguments and counter-arguments raised were carefully considered by me. After examining of issue critically, I find no substance in assessee's arguments that ITO made assessment in haste. first contention is rejected accordingly." From above, it is clear that instead of giving reasons as to how ITO was justified in rushing through assessment, ld. AAC merely decided issue by expressing his opinion that ITO was right. If he had given reasons as to how ITO was right, it would not be case for assessee to raise Ground No. 1 which we are now considering. However, unfortunately, he has not given necessary reasons and has not shown by such reasoning how assessment made by ITO did not volute principles of natural justice. It is now well settled when there is gross violation of principles of natural justice order resulting from such violation will be bad in law. However, if violation of this principle is not so grave then party, which suffered because of this violation is entitled to another opportunity to meet case. In our considered opinion, on entire evidence that is before us in form of paper book filed by Revenue running over 14 pages and paper book as filed by assessee containing 48 pages, considering it with orders of authorities below, it is reasonable and fair that orders of authorities below be set aside with direction to ITO to make assessment de novo in accordance with law, after affording reasonable opportunity of being heard of assessee. We order accordingly. Since we are setting aside orders of authorities below, we are not dealing with merit of grounds of appeal raised from both sides. *** OM PRAKASH JAIN v. INCOME TAX OFFICER