Income Tax Notice Sent to Wrong Address: ITAT sets aside Order u/s 144 of Income Tax Act [ Read Order]

Recently, the Ahmedabad “A” Bench of Income Tax Appellate Tribunal (ITAT) set aside an order passed under Section 144 of the Income Tax Act, 1961 (ITA), noting that income tax notices were not sent to the actual address of the assessee.

On 08.03.2018, a notice under Section 142(1) of ITA was issued to Radha Mohan Education, the assessee/appellant , requesting the submission of a true and correct return of income for Assessment Year 2017-18.

According to Section 142(1) of ITA, the assessee was required to furnish the return of income as per the prescribed conditions and manner outlined in Rule 12 of the Income Tax Rules, 1962, by 07.04.2018.

However, the assessee failed to file the return of income under Section 139 (by 31.03.2018) and also failed to respond to the notice issued under Section 142(1) of the tax legislature.

 The Assessing Officer(AO) noted that the assessee had deposited Rs. 4,90,000/- in cash in its bank account during the demonetization period (9th November 2016 to 30th December 2016) in old currency.

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Due to the assessee's non-compliance with statutory notices and failure to file the return of income, the AO proceeded under Section 144(1)(b) of the statute, resulting in an addition of Rs. 1,34,87,426/- as unexplained money under Section 69A of ITA.

Aggrieved by the assessment order, the assessee appealed before the Commissioner of Income Tax (Appeals) [CIT(A)], who dismissed the appeal.

Aggrieved again, the assessee appealed before ITAT.

The counsel for assessee argued that the notices were sent to an incorrect address in Village Moyad, District Mehsana, instead of the correct address in Village Moyad - 383 120, Tal: Prantij, District Sabarkantha.

Furthermore, the online notices were not received because they were sent to an old email ID belonging to a former Trustee, who did not share them. As a result, the assessee could not comply with the assessment notices.

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Although the assessee trust eventually filed a physical appeal before the CIT(A), it was unable to do so online due to the absence of a password and login ID.

The notices were received on the email of one of the trustee’s sons, but he inadvertently failed to inform his father, who is the trustee of the assessee trust.

Therefore, the assessee requested that the matter be remanded back to the AO, as additional evidence has been submitted that needs to be considered on its merit.

In opposition, the counsel for Revenue supported the Assessment Order and the CIT(A)'s decision.

After considering the submissions and reviewing the available records, the bench of Ms Suchitra Kamble and Mr Narendra Prasad Sinha observed that it was evident that the reasons provided by the assessee trust, through its Chairman, for not appearing before the Assessing Officer and CIT(A) and for not submitting the required documents, are genuine.

Therefore, the tribunal found it appropriate to remand the matter back to the AO for a thorough adjudication, and verification of the documents submitted by the assessee as additional evidence.

It was concluded that the assessee should be granted an opportunity for a hearing, following the principles of natural justice.

Thus, the ground raised by the assessee was allowed.

To Read the full text of the Order CLICK HERE

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Radha Mohan Education Charitable Trust vs The Income Tax Officer , 2024 TAXSCAN (ITAT) 962 , Shri Dhinal Shah , Shri Arvind Kumar