Highlighting the impact of the digital divide in tax administration, the Income Tax Appellate Tribunal (ITAT) has granted relief to a taxpayer who failed to respond to Income-tax (I-T) notices due to lack of computer literacy, holding that such circumstances warranted condonation of delay and a fresh opportunity to be heard.An appeal filed by Uganti Yadav (the taxpayer) was dismissed by the Commissioner of Income Tax (Appeals) solely on the ground of delay, without examining the merits of additions to her income made during reassessment proceedings.The reassessment related to the tax treatment of income arising on the compulsory acquisition of agricultural land for the purpose of infrastructure. The ITAT order is silent on the quantum of tax demand raised in the hands of the taxpayer. However, it points out that the reassessment was done under the ‘best judgment’ provisions. When a taxpayer does not respond to a notice, these provisions enable tax authorities to proceed based on available information.Before the ITAT, it was submitted that the taxpayer was not computer literate and had neither created an e-filing account nor possessed an email address. As a result, she remained completely unaware of the notices issued electronically during the assessment process. The tribunal noted that even the communication on record did not mention any email address of the taxpayer, reinforcing the claim that electronic notices may not have effectively reached her.The taxpayer only became aware of the demand notice after it was physically delivered. She then approached a tax consultant and created an e-filing account using her son’s email address in order to file an appeal.Additionally, she contested the taxability of compensation received on compulsory acquisition of agricultural land. Her contention was that the sum, including solatium (additional amount) and interest, formed part of the compensation and should be treated as tax free income.The ITAT in its order emphasised that procedural rules are meant to advance justice and should not be applied in a manner that penalises individuals who are unable to access or navigate digital systems. It directed that the matter be heard afresh after giving the taxpayer an adequate opportunity to present her case and submit supporting documents
