LADHU RAM,BARMER vs. ITO WARD-1, BARMER

At the outset, learned counsel for the assessee submitted that the assessment as well as the first appellate proceedings came to be concluded ex parte, as the assessee had no effective knowledge of the notices issued during the course of proceedings. In support of the said contention, learned counsel referred to the detailed chronology of notices and events placed in the paper book. It was pointed out that the notice under section 148 dated 31.03.2021 and the subsequent notices issued during the assessment proceedings were transmitted to the e-mail address premnupur55@rediffmail.com, which belonged to the counsel who had earlier filed the return of income of the assessee but who, thereafter, was no longer in communication or connected with the assessee. Consequently, according to the assessee, he remained unaware of the reassessment proceedings and the assessment ultimately came to be completed ex parte under section 147 read with section 144.

Learned counsel further drew our attention to the chronology of the proceedings before the learned CIT(A). It was submitted that even the first notice dated 14.10.2024 fixing the hearing on 24.10.2024 had been transmitted to an

Considering the aforesaid facts and the chronology placed before us, we are of the opinion that the assessee deserves one effective opportunity to place his case and the relevant documentary evidence before the Assessing Officer. Determination of taxable income ought, as far as possible, to rest upon consideration of the relevant facts and material rather than remain founded upon an ex parte assessment where the absence of the assessee has been reasonably explained. Accordingly, in the interest of substantial justice, we set aside the impugned order of the learned CIT(A) in the quantum appeal as well as the assessment order and restore the entire matter to the file of the Assessing Officer for fresh adjudication. The Assessing Officer shall provide adequate opportunity of hearing to the assessee and shall consider all the submissions, explanations and

Coming to the two penalty appeals, the penalties under sections 271(1)(b) and 271(1)(c) have their genesis in the assessment proceedings which have now been set aside and restored to the Assessing Officer for de novo adjudication. Once the underlying assessment itself has been set aside and the entire matter stands relegated to the stage of the Assessing Officer, the penalties arising out of such assessment proceedings cannot presently survive on their existing foundation. Accordingly, the penalties levied under sections 271(1)(b) and 271(1)(c) are deleted.

In the result, ITA No. 771/Jodh/2025, being the quantum appeal, is allowed for statistical purposes, whereas ITA Nos. 772 and 773/Jodh/2025, being the penalty appeals, are allowed.