Sufficient cause for non-compliance with tax notice sustained where illness prevented attendance and section 146 relief was wrongly refused.

Non-compliance with a section 143(2) notice was held to be supported by sufficient and reasonable cause where the assessee's illness prevented attendance and the explanation remained unrebutted. The rejection of the section 146 petition was unsustainable because the lower authorities did not properly appreciate the assessee's practical inability to contact authorised representatives or arrange production of documents through them. On those facts, the petition to reopen the ex parte assessment under section 144 ought to have been accepted, and the assessment was treated as reopened.

---

---

Issues: Whether the assessee had sufficient and reasonable cause for non-compliance with the notice issued under section 143(2) of the Income-tax Act, 1961, and whether the petition under section 146 for reopening the ex parte assessment under section 144 was wrongly rejected.

Analysis: The assessee's case was that non-compliance occurred because he was ill and unable to attend the hearing. That explanation remained unrebutted by the lower authorities. The rejection of the petition proceeded on the footing that the assessee was represented by authorised representatives and could have arranged production of documents through them. The illness of the assessee and the practical inability to contact representatives were not properly appreciated, and the rejection of the section 146 petition was found to be unsustainable on the facts and circumstances.

Conclusion: The non-compliance was for sufficient and reasonable cause, and the petition under section 146 ought to have been accepted. The assessee succeeded and the ex parte assessment under section 144 was treated as reopened.

---