Failure in Updating E-Mail Address with Income Tax Department: Kerala High Court dismisses Petition against Demand Notice [Read Oder]

In a recent case, the Kerala High Court has dismissed the writ petition challenging the assessment order and notice of demand alleging violation of the principles of natural justice. The court found that the assessee failed in Updating E-Mail address with income tax department.

Lakeshore Hospital And Research Centre Limited, the petitioner/assessee company is  a hospital. The e-mail address of the Chief Financial Officer (CFO), the Principal Officer, was provided to the Income Tax Department by the petitioner for official communication. Assessment for the assessment year (AY) 2022–2023 was processed under Section 143(1) and selected under the Computer-Assisted Scrutiny Selection category (CASS category) for complete scrutiny. A Show cause notice under Section 143(2) of the Income Tax Act, 1961 was issued and the petitioner submitted a reply.

The department had issued two notices under Section 142(1) of the Act to the email address of the CFO, which was not accessible to the company and therefore could not be responded to. A show cause notice under Section 144 of the Act was issued to the petitioner by the respondent, which was followed by a show cause notice proposing to add 10% of the amount claimed in the returns as 'other expenses'. These notices were also sent to the e-mail address of the former CFO, which was not accessible to the company, and therefore, the petitioner was not aware and could not respond. The opportunity to file submissions online was closed.

It was contended that since the petitioner did not receive any notice pursuant to reply, they were under the impression that the matter was no longer being proceeded with. While doing so, the department has completed the assessment under Section 143(3). It was only on receipt of the assessment order that the petitioner realized that the earlier notices had been received at the e-mail address of the former CFO, who is now defunct.

The department contended that the e-mail ID provided by the assessee in the e-filing portal is cfo@lakeshorehospital.org , which is the organizational e-mail ID of the petitioner, and all correspondences were made to the same, including the final show cause notice.

It was found that due to an error on their part in not updating or changing the e-mail address with the department, the show cause notices were unnoticed and could not be responded to on time. Therefore, when the petitioner is at fault, as they did not update or change the e-mail address with the Department, they cannot legitimately complain that there is a violation of the principles of natural justice.

A single bench of Justice Murali Purushothaman has observed that when the petitioner-assessee is at fault, as they did not update or change the email address with the Department, they cannot legitimately complain that there is a violation of the principles of natural justice.

While dismissing the writ petition, the court held that if the petitioner files an appeal under Section 246A of the Act before the statutory appellate authority within a period of 15 days from the date of receipt of a copy of the judgement, the appeal shall be entertained by the authority and appropriate orders shall be passed on merits.

To Read the full text of the Order CLICK HERE

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