ITAT Bangalore Grants Fresh Opportunity in Ex Parte Capital Gains Assessment; Stay Petition Dismissed as Infructuous

Background

The Income Tax Appellate Tribunal Bangalore Bench has restored to the Assessing Officer the case of Smt. Archana Ravi Kumar for Assessment Year 2018–19, setting aside an ex parte reassessment that had brought long-term capital gains to tax in the absence of representation by the assessee.The assessment was reopened under Sections 147 and 148A on the basis of Insight Portal inputs indicating receipt of ₹79.20 lakh towards sale of immovable property, on which tax had been deducted under Section 194-IA. As the assessee had not filed a return and did not respond to notices, the Assessing Officer completed a best judgment assessment under Sections 144 and 147, estimating indexed cost at ₹6 lakh and determining taxable long-term capital gains of ₹73.20 lakh. The first appellate authority also confirmed the addition after four unanswered notices.

Tribunal’s Findings

Before the Tribunal, the assessee submitted that she was residing in Saudi Arabia with her husband and was not regularly monitoring her email. She relied on her father for handling tax matters and was not registered on the e-filing portal during the relevant period. The Bench accepted that there was reasonable cause for non-compliance. In the interest of natural justice, the Tribunal restored the matter to the Assessing Officer with directions to allow the assessee to substantiate the cost of acquisition and recompute capital gains in accordance with law.