ITAT Overturns CIT(A) Order: Notices Wrongly Sent via Email Despite Assessee's Explicit Opt-Out [Read Order]

The Income Tax Appellate Tribunal (ITAT), Raipur Bench, has set aside an ex-parte appellate order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, for the assessment year 2017–18, after finding that notice of hearing was sent via email despite the assessee having explicitly opted out of electronic communication in Form 35.

Sarita Konda challenged the order of the CIT(A) dated 26 December 2023, which dismissed her appeal ex-parte for non-compliance. The assessment was originally framed under Section 143(3) on 30 November 2019, wherein the Assessing Officer treated Rs.16,31,000 received as alimony and Rs.15,02,867 received as death claim benefits from her deceased ex-husband as taxable income under Section 56(2)(v) of the Income Tax Act, 1961. The total income was assessed at Rs.38,40,797. The additions were made on the ground that these receipts were not explained to the satisfaction of the Assessing Officer.

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The assessee took the matter to the CIT(A), but the appeal was dismissed after she failed to appear on three scheduled dates 19 January 2021, 7 November 2023, and 29 November 2023. The CIT(A) noted the repeated absence and relied on judicial precedents to justify the dismissal, stating that the assessee had failed to prosecute the appeal and bring any material on record.

Before the Tribunal, the assessee contended that she had not received physical or hard copies of any of the hearing notices. Her representative, R.B. Doshi, pointed out that in Form 35, the assessee had clearly opted out of service of notices through email. It was only when her counsel accessed the e-portal account on 5 December 2024 that she became aware of the appellate order. The delay in filing the appeal was explained with supporting affidavit dated 6 January 2025.

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Ravish Sood (Judicial Member) examined the claim and found merit in the contention that no physical service of notice had taken place. The Tribunal noted that all three hearing notices were issued electronically via ITBA, which contravened the assessee’s communication preference selected in Form 35. The Tribunal held that the assessee was denied an opportunity to present her case, not by choice but due to the procedural lapse of the department.

Accordingly, the Tribunal allowed the appeal for statistical purposes, directing the CIT(A) to re-adjudicate the matter after validly serving notice to the assessee and providing a reasonable opportunity to be heard.

To Read the full text of the Order CLICK HERE

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