Ex parte unexplained investment assessment requires merits examination, reasonable opportunity, and a speaking order on remand.

Ex parte assessment of immovable-property purchases as unexplained investment was addressed where non-compliance with statutory notices resulted from the unexpected exit of accounts and finance personnel. The notes state that the lower authorities relied principally on non-compliance and did not examine the addition on its merits. They describe the assessment and appellate orders as set aside, with remand for de novo adjudication requiring reasonable opportunity to the assessee and a speaking order.

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Issues: Whether an ex parte assessment treating the purchase of immovable properties as unexplained investment could be sustained where the assessee did not comply with statutory notices and the lower authorities had not examined the matter on merits.

Analysis: The explanation that tax-related compliance was disrupted by the unexpected exit of the accounts and finance personnel was accepted as sufficient. The lower authorities had proceeded principally on non-compliance without addressing the merits of the addition. A fresh adjudication after affording reasonable opportunity and requiring a speaking order was necessary to meet the ends of justice.

Conclusion: The assessment and appellate orders were set aside, and the matter was restored to the Assessing Officer for de novo adjudication after granting reasonable opportunity to the assessee. The issue was decided in favour of the assessee.

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