ITAT Agra Quashes Ex-Parte Assessment of ₹5.18 Crore; Grants Final Opportunity to Senior Citizen Assessee

The adjudication of tax disputes relies heavily on the active participation of the assessee and the adherence to the principles of natural justice by the revenue authorities. In a recent judicial pronouncement, the Income Tax Appellate Tribunal (ITAT), Agra Bench, addressed a complex scenario involving prolonged non-compliance, severe medical hardships, and a high-value tax demand. In the case of Om Prakash Yadav Vs ITO, the Tribunal opted to restore an ex-parte assessment back to the file of the Assessing Officer (AO).

This ruling highlights the delicate balance appellate tribunals must strike between enforcing strict procedural compliance and ensuring that an assessee is not deprived of a fair hearing due to genuine, unavoidable hardships. The Tribunal excused a substantial filing delay and mandated a fresh evaluation of the facts, explicitly warning the assessee to cooperate fully in the subsequent proceedings.

Detailed Factual Matrix of the Dispute

The controversy originated from the assessee's failure to file an income tax return for the Assessment Year 2018-19. Consequently, the tax department initiated proceedings to determine the taxable income based on available information.

The Initial Assessment under Section 144 and Section 147

As per the order dated 06.03.2023, the Assessing Officer finalized the assessment proceedings by invoking Section 147 read with Section 144 of the Income Tax Act, 1961. Because the assessee did not participate or furnish the requisite details, the AO was compelled to pass a "best judgment" assessment.

The revenue authorities computed the total income of the assessee at ₹5,18,80,567. According to the assessment records, this figure was derived from two primary additions:

  • An amount of ₹5,06,50,000 was added as unexplained short-term capital gains. This addition stemmed from the sale of two immovable properties where the assessee failed to provide acquisition details, holding periods, or proper capital gain computations.
  • An additional sum of ₹12,30,567 was incorporated into the total income as an unexplained investment pertaining to the purchase of a motor vehicle.