Best judgment assessment remitted for fresh consideration where relevant evidence was not examined due to inability to comply.

A best judgment assessment under section 144 was completed ex parte after non-compliance with notices, and the appellate order had confirmed the addition based on bank cash deposits. The Tribunal accepted that the assessee had produced medical and supporting material and stated that the relevant evidence could be substantiated by the legal heir. The matter was remitted for de novo adjudication so the assessing authority could examine the evidence and grant an effective opportunity of hearing. The principle applied is that where relevant material was not considered because of inability to comply and a plausible cause is shown, fresh consideration is warranted.

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Issues: Whether the best judgment assessment made under section 144 of the Income-tax Act, 1961, and the appellate order confirming it should be set aside and the matter restored for fresh consideration in view of the assessee's inability to produce material before the assessing authority.

Analysis: The assessment was completed ex parte after notices issued during assessment proceedings did not elicit compliance, and the addition related to cash deposits in the bank account. Before the Tribunal, the assessee produced medical material and supporting documents and stated that the relevant evidence could be substantiated by the legal heir. In these circumstances, the dispute turned on whether the material should be examined afresh by the assessing authority after granting an effective opportunity of hearing.

Conclusion: The matter was remitted to the assessing authority for de novo adjudication with a direction to consider the evidence filed and afford adequate opportunity to the assessee.

Ratio Decidendi: Where material relevant to a best judgment assessment was not examined because of the assessee's inability to comply and a plausible cause for non-compliance is shown, the assessment can be restored for fresh consideration after giving an effective opportunity of hearing.

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