In a significant case, the Kolkata Income Tax Appeallate Tribunal ( ITAT ) held that failure to serve hearing notice under Income Tax Act, 1961 invalidates ex-parte order. The ITAT directed the assessee to furnish its correct address before the competent authority.
M/s Littlestar Projects Pvt. Ltd, the assessee company had challenged the ex-parte order passed by the AO under section 144 as well as the ex-parte order passed by the CIT(A) alleging that the hearing notices issued to the assessee through registered post were not responded to by the assessee.
The assessee contended that the address mentioned in the assessment order was incomplete as well as wrong, and hence, notices sent through registered post were not served upon the assessee. It was also contended that the email address mentioned in the return of income was different to that has been mentioned in appeal Form 35 before the CIT(A).
The two member Bench of Sanjay Garg (Judicial Member) and Sanjay Awasthi (Accountant Member) observed that “the assessee has further changed its address and the assessee is required to duly brought to the knowledge of the Assessing Officer/CIT(A) regarding the change in address”.
The Bench found from a perusal of the Form No.36 that the assessee has changed its address later on, and this is why the hearing notices could not be served upon the assessee during the appellate proceedings. Because of the change of address of the assessee, the notices issued by the AO during course of assessment proceedings were returned with mark ‘not found’.
It was pointed that in case assessee used to change its address, then it is required to duly brought the same to the knowledge of the Assessing Officer/CIT(A) regarding the change in address. The Court that the assessee could not present its case before the CIT(A) for want of service of notice. The ITAT set aside the order of the CIT(A) with a direction to decide the appeal of the assessee afresh on merits.
The ITAT also directed the assessee to make an application for change of address in the PAN Database as per rules. It was further clarified that in case the appeal is decided by serving notice at proper address, then the assessee will be estopped from saying that the notices have not been served at the correct address.
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