The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) recently in a ruling set aside an ex-parte assessment order as the notices from the Assessing Officer ( AO ) was never served to the assessee/appellant, the taxpayer, Raj Rani, a resident of Village Lath, Gohana, Haryana, which resulted in non-compliance.
The case arose from an assessment conducted under Section 147 of the Income Tax Act 1961 ( ITA ) for the 2012-13 financial year. The Income Tax Officer ( ITO ) of Ward 5 in Sonipat had previously made an ex-parte decision that resulted in an additional tax liability of Rs. 49,02,500 based on cash deposits in the assessee’s savings account at Punjab National Bank.
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During the appeal, the assessee’s legal representatives, Advocates Samyak Jain and Subodh Jain, argued that the Assessing Officer ( AO ) had failed to serve the necessary notices to their client. They provided evidence indicating that the email ID used for correspondence was incomplete or invalid, preventing the assessee from receiving critical communications. Further, they highlighted that, even though the assessee responded to queries raised by the Commissioner of Income Tax (Appeals) [CIT(A)] on March 13, 2024, the response was overlooked in the final decision. The CIT(A) had issued a notice on February 23, 2024, setting a deadline of March 11, 2024, for reply submission. By the time the assessee’s response was received, the CIT(A) had already passed the order, citing a delay in compliance.
In response, the Senior Departmental Representative, Sanjay Kumar, defended the CIT(A)’s decision, stating that the taxpayer had shown a pattern of non-cooperation and missed several deadlines. The delay in submitting the response was argued to be part of a larger trend of non-compliance.
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However, the Tribunal bench comprising Judicial Member Vikas Awasthy acknowledged that the failure to serve proper notice to the taxpayer had compromised the taxpayer’s ability to respond adequately, thus violating procedural fairness.
Recognizing the importance of due process, the ITAT ruled to set aside the previous orders and instructed the Assessing Officer to conduct a de novo assessment, providing a fair opportunity to the assessee to present the case. The ITAT also directed the assessee to provide a functional email address to ensure smooth communication for future proceedings.
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