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2024 (3) TMI 479 - HC - Income TaxMethod of communication of notice - Service of notice generally u/s 282(1) - as per assessee SCN was not sent on the petitioner s email or otherwise and was only reflected on the e-portal of the Department - Notice initiating proceedings under Section 12A(1)(ac)(iii) - HELD THAT - It is essential that before any action is taken, a communication of the notice must be in terms of the provisions as enumerated hereinabove.The provisions do not mention of communication to be presumed by placing notice on the e-portal. A pragmatic view has to be adopted always in these circumstances. An individual or a Company is not expected to keep the e-portal of the Department open all the time so as to have knowledge of what the Department is 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 the same are required to be necessarily followed. This Court is of the firm view that the petitioner has not been given sufficient opportunity to put up his pleas with regard to the proceedings under Section 12A(1)(ac)(iii) of the Act of 1961 and as he was not served with any notice. Therefore, he would be entitled to file his reply and the Department would of course be entitled to examine the same and pass a fresh order thereafter. Writ Petition is allowed and the order is quashed and set aside.
Issues involved:
The issues involved in the judgment are related to the service of a show cause notice electronically, specifically through an e-portal, and the interpretation of provisions under Section 282(1) of the Income Tax Act, 1961 and Rule 127(1) of the Income Tax Rules, 1962. Issue 1: Service of notice through e-portal The petitioner filed an application under Article 226 of the Constitution of India seeking to stay the operation of a Show Cause Notice dated 24.02.2024, which was a subsequent development after the filing of the main Writ Petition. The main issue was the communication of the notice and reminders through the e-portal of the Department without being served on the petitioner personally. Details: - The show cause notice was issued to the petitioner for initiating proceedings under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, but it was only reflected on the e-portal of the Department and not sent to the petitioner's email or otherwise. - The Department argued that communication of the notice electronically would include placing it on the e-portal, and since the petitioner submitted forms on the e-portal, it could be presumed that he had knowledge of the notice and reminders. - The Court disagreed with this interpretation, emphasizing the provisions of Section 282(1) of the Act of 1961 and Rule 127(1) of the Income Tax Rules, which specify the method and manner of service of notice and orders, including electronic communication. Issue 2: Compliance with legal provisions The Court analyzed Section 282(1) of the Income Tax Act, 1961 and Rule 127(1) of the Income Tax Rules, emphasizing the importance of following the prescribed procedures for communication of notices. The Court highlighted the need for a pragmatic approach and adherence to principles of natural justice in such matters. Details: - The provisions under Section 282(1) and Rule 127(1) outline the addresses to which a notice or communication may be delivered or transmitted, including electronic communication. - The Court stressed that communication of a notice must be in accordance with the specified provisions, and it cannot be presumed by merely placing the notice on an e-portal. - Upholding the principles of natural justice, the Court concluded that the petitioner had not been given sufficient opportunity to respond to the proceedings under Section 12A(1)(ac)(iii) due to the lack of proper service of notice. Decision: The Writ Petition was allowed, and the order dated 16.01.2023 was quashed and set aside. The Department was directed to provide the petitioner with an opportunity to be heard, allowing them to file a reply within three weeks. The Department was instructed to pass a fresh order after considering the petitioner's submissions, ensuring compliance with the principles of natural justice.
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