2024 (7) TMI 431 - AT - Income Tax

Dismissal of appeal by CIT(A) ex-parte - improper service of notice - notices were sent to an incorrect email address, which led to the non-receipt of the notices by the Assessee - HELD THAT - Procedural lapse denied the Assessee a fair opportunity to be heard. The principle of natural justice mandates that an assessee must be given an adequate opportunity to present their case. The judicial pronouncements consistently emphasize the importance of proper service of notices as a fundamental requirement for the validity of proceedings under the Income Tax Act, 1961. Extrapolating these principles to the context of email communications, it is evident that incorrect email addresses would constitute improper service, thereby invalidating any subsequent actions based on such notices. Courts have repeatedly held that procedural requirements must be strictly followed to ensure fairness and legality in tax administration. Thus, we are of the considered opinion that CIT(A) has erred in dismissing the appeal ex-parte without providing the Assessee a fair opportunity to present their case. Therefore, in the interest of justice, we set aside the orders of CIT(A) for both the assessment years and restore the matter back to the file of Ld.CIT(A) for fresh adjudication, after providing an adequate opportunity of being heard to the Assessee. Appeals of the assessee allowed for statistical purposes.

Summary

Issues involved:
Appeal against dismissal of appeal by Ld.CIT(A) for AYs 2005-2006 and 2006-2007 due to incorrect email address for notices.

Analysis:
Issue 1: Dismissal of appeal without fair opportunity
The Assessee's appeals were dismissed by Ld.CIT(A) due to non-receipt of notices as they were sent to an incorrect email address. The Assessee contended that this procedural error deprived them of a fair opportunity to present their case. The Form 35 filed by the Assessee clearly indicated the correct email address, highlighting the error in sending notices. The principle of natural justice mandates that an assessee must have a proper chance to be heard in proceedings, which was denied in this case.

Issue 2: Importance of proper service of notices
The judgment emphasized the significance of proper service of notices in tax proceedings under the Income Tax Act, 1961. Incorrect email addresses for sending notices were deemed as improper service, rendering subsequent actions based on such notices invalid. Legal precedents consistently stress the strict adherence to procedural requirements to ensure fairness and legality in tax administration. The failure to provide correct notice undermined the Assessee's right to a fair hearing, necessitating the setting aside of the Ld.CIT(A)'s orders.

Decision:
The Tribunal found in favor of the Assessee, setting aside the orders of Ld.CIT(A) for both assessment years and remanding the matter for fresh adjudication. The decision was made in the interest of justice to ensure the Assessee receives a proper opportunity to present their case. Consequently, both appeals of the Assessee were treated as allowed for statistical purposes. The order was pronounced in an open court at Ahmedabad on 26 June 2024.