Ex Parte Assessment Challenge: Santosh vs. ACIT (ITA 1373/DEL/2022)

Background

The dispute originated from an assessment order dated 07.06.2019 for the assessment year 2011-12, issued by the learned Commissioner of Income Tax (Appeals)-15, New Delhi. The primary contention in this appeal by the appellant, Santosh, against ACIT, was the completion of the assessment as well as the first appellate proceedings ex parte, a situation where the proceedings go forward without the presence or participation of one party.

Contentions of the Parties

The appellant, represented by Sh. Rattan Singh Yadav, argued that due to residing abroad, specifically in Australia, Santosh could not receive the notices sent by the Assessing Officer and the learned Commissioner (Appeals). The inability to participate in the proceedings was not due to negligence but rather due to circumstances beyond the appellant’s control. Thus, a plea was made for another opportunity to represent their case.

On the other hand, the Departmental Representative, Sh. Om Prakash, conceded that since the proceedings before the departmental authorities concluded ex parte, an opportunity could be given to the assessee to present her case.

Judicial Findings and Conclusion

The bench, presided over by Shri Saktijit Dey, noted that the assessment was completed under section 144 read with section 147 of the Act, citing the reason that notices issued returned back unserved with the postal remarks ‘no such person’. Acknowledging the complications arising from the assessee’s overseas residence, and considering the counsel’s willingness to represent the case afresh, the judgment set aside the earlier order, restoring the issues to the file of the Assessing Officer for fresh adjudication after ensuring the assessee is given a due opportunity to be heard.

Conclusion

The appeal was allowed for statistical purposes, indicating a victory for the assessee in securing another chance to present her case. This case underscores the importance of ensuring fair assessment procedures and the significance of providing ample opportunity for taxpayers to participate in the assessment process, regardless of their geographical location. The judgment dated 25th August 2022, not only provided a respite for Santosh but also set a precedent for similar cases where assesses are unable to be part of the proceedings due to valid reasons.