2024 (6) TMI 521 - AT - Income Tax

Issue of notice on wrong and invalid address - Violation of natural justice principles - ex-parte order passed by the CIT(A) due to lack of proper service of notice - CIT(A) has neither issued notice on the email address given in the profile information or alternate email address - HELD THAT - Admittedly, CIT(A) has issued notice on the email address of the former CA given in the Income Tax Return (ITR). As undisputed fact on record that the CIT(A) has neither issued notice on the email address given in the profile information or alternate email address given. As per clause 11 of the CBDT Notification No. 139 dated 28.12.2021, the ld. CIT(A) is required to communicate the notice through the email id available in Form 35 of the appeal memo. In our view, the issue of notice by the ld. CIT(A) on the email address other than the email address given in Form 35 of the appeal, tantamount to issue of notice on wrong and invalid address and as such no service of notice. In our view, rejection of appeals without valid service of notice either by postal address or electric communication and further without discussing merits of the case would be held to be in gross violation of principles of natural justice. This issue of ex-parte order passed by the ld. CIT(A) due to lack of proper service of notice has been settled by various courts, acknowledging that it is impractical for the assessee to consistently monitor the e-portal of the Income Tax Department. Recently, in the case Munjal BCU Centre of Innovation and Entrepreneurship, Ludhiana v. CIT(E), Chandigarh 2024 (3) TMI 479 - PUNJAB HARYANA HIGH COURT observed that the Income Tax Department must communicate notices in accordance with the provisions of law and tax-payers are not accepted to keep the department e-portal open in all the times. As further observed that before any action is taken by the department, the communication of notice must be in terms of provisions of law. The provisions do not mention that communication to be presumed by placing notice on the e-portal. A pragmatic view has to be adapted always in these circumstances and individual or company is not accepted to keep the e-portal to the department open in all the times to have the knowledge of what the department supposed to be doing with regard to the submissions of Forms etc. The principles of natural justice are inherent in the Income Tax Provisions and same are required to be necessarily followed. As evident that the appellant has not been given sufficient opportunity to put up pleas/submissions with regard to the compliance of the notices issued by the CIT(A) as he was not served, any of the notices. In our view, the assessee would be entitled to be granted sufficient opportunity of being heard to file his reply and the ld. CIT(A) of course be entitled to examine the same and pass afresh order thereafter. In view of natural justice, we consider it deem fit to remand back to the matter to the file of the CIT(A) to adjudicate the appeal afresh after granting sufficient opportunity of being heard and considering the submissions made by the appellant assessee.

Summary

Issues Involved:
The appeal challenges ex-parte orders by the ld. CIT(A) National Faceless Appeal Centre (NFAC) for Assessment Years 2015-16, 2016-17 & 2012-13, alleging violation of natural justice principles.

Violation of Principles of Natural Justice:
The appellant's appeal was filed late by one day, which was condoned, and heard along with other cases. The appellant argued that the ex-parte order was passed without issuing notice to the correct email address provided in Form 35, leading to the appellant's inability to respond. The appellant contended that the order passed u/s 250(6) was flawed as agricultural income was declared, and proper records were maintained. The appellant requested a remand to the ld. CIT(A) for a fair hearing as per Notification No. 139 dated 28.12.2021.

Service of Notice and Natural Justice:
The ld. CIT(A) issued notice to an incorrect email address, failing to follow the requirement to communicate through the email id in Form 35. This failure to provide proper notice was deemed a violation of natural justice principles, as it hindered the appellant's ability to respond. The issue of ex-parte orders due to improper notice has been recognized by various courts, emphasizing the impracticality of monitoring the Income Tax Department's e-portal constantly.

Legal Precedent and Remand:
The Hon'ble Punjab & Haryana High Court emphasized the necessity of communicating notices in accordance with the law, rejecting the notion that taxpayers must keep the department's e-portal open at all times. The court stressed that natural justice principles must be adhered to in Income Tax Provisions. The appellant was not given a fair opportunity to respond, leading to the decision to remand the matter back to the ld. CIT(A) for a fresh adjudication after granting sufficient opportunity for the appellant to be heard.

Appellate Tribunal Decision:
All four appeals were allowed for statistical purposes, with the matter restored back to the ld. CIT(A) for a fair hearing. The Tribunal did not express any view on the merits of the case, leaving the ld. CIT(A) to adjudicate the issues as per law.

*Order pronounced in the open court on 06.05.2024*