Judgment :- 1. This is a reference under S.256 (1) of the Income-tax Act, 1961. The assessment year concerned is 1963 64; and the accounting period the Malayalam year 1137 M. E. The question referred is: "Whether on the facts and in the circumstances of the case, there was non-compliance of the provisions of S 142 (3) and if so whether the assessment order passed under S.143 (3) was vitiated?" 2. S.142 of the Income-tax Act, 1961, deals with enquiries before assessments. Sub-section (2) of that section provides that for the purpose of obtaining full information in respect of the income or loss of any person, the Income-tax Officer may make such enquiry as he considers necessary; and sub-section (3): "The assessee shall, except where the assessment is made under S.144, be given an opportunity of being heard in respect of any material gathered on the basis of any enquiry under sub-section (2) and proposed to be utilised for the purpose of the assessment." 3. We are not concerned with an assessment made under S.144 of the Act. The assessment was under sub-section (3) of S.143. 4. Sub-section (3) of S.142 only gives statutory recognition to a principle of natural justice. It was being observed during the currency of the Indian Income-tax Act, 1922, even though that Act contained no express provision in that behalf. It formed the foundation for the decision of the Supreme Court in Dhakeswari Cotton Mills Ltd., v. Commissioner of Income-tax (1954) 26 ITR. 775, and of this Court in Swamy Bros. v. Commissioner of Income-tax, (1958) 34 ITR.123. 5. There is no doubt that the Income-tax Officer in fixing the gross profit on rice at 2.5% and on provisions at 5% as far as the head office of the assessee was concerned depended on the gross profits disclosed by cases which he considered to be comparable to that of the assessee. The following passage from his order makes this abundantly clear: "I shall, bearing mind the profit disclosed by traders in similar line, estimate the gross profit at 2.5 per cent on rice and 5 per cent on provisions and add back the difference to the disclosed results." 6. It is common ground that no details of the cases which the Income-tax Officer considered as comparable were ever furnished to the assessee. It is common ground that no details of the cases which the Income-tax Officer considered as comparable were ever furnished to the assessee. This is a violation of the settled principle on the subject and the provision of sub-section (3) of S.142. 7. It follows that the question referred has to be answered in the affirmative, that is, in favour of the assessee and against the Department, as far as the assessment relating to the head office of the assessee is concerned. We do so; but in the circumstances of the case without any order as to costs. 8. The controversy before us was only as regards the head office of the assessee. 9. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be sent to the Appellate Tribunal as required by sub-section (1) of S.260 of the Income-tax Act, 1961. \