ITAT quashes CIT(A)’s Ex Parte Penalty Orders Due to Wrong Email Service [Read Order]

In a recent decision, the Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) condoned delay and set aside the Chief Commissioner of Income Tax (Appeals) (CIT(A)) ex parte order in penalty matters after finding that notices were sent to the wrong email.

Sunita Ashokbhai Sharma (assessee) faced three separate penalty orders for non-compliance with notices and procedural lapses under Sections 271(1)(b), 271A, and 271F of the Income Tax Act, 1961. These penalties were levied in connection with the assessment proceedings for the year 2015-16.

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On appeal the CIT(A)  upheld all penalty orders issued by  the Assessing Officer (AO) ex parte after the assessee failed to respond to notices served via email.

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The assessee later discovered that the notices were sent to a different email ID, which did not belong to her or any of her representatives. After becoming aware of the orders through recovery notices, the assessee filed an appeal before the ITAT with a delay of 216 days, seeking condonation.

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The counsel for the assessee, Mehul Ranpura, submitted evidence from the Income Tax portal showing the correct email ID and argued that the notices were sent to a wrong email ID that doesn’t belong to the assessee.

Regarding the penalties, the counsel contended that since the related quantum proceedings were remitted back to the AO, the penalty proceedings should also be reconsidered based on the outcome of the reassessment.

Meanwhile, the counsel for the respondent, Abhimanyu Singh Yadav opposed the condonation, terming the delay inexcusable. The counsel claimed that the assessee did not act diligently, and therefore, no leniency should be granted.

The arguments were presented before the bench led by Dr. Arjun Lal Saini (Accountant Member).
The tribunal found that the assessee's registered email was indeed different from the one to which the notices and CIT(A)’s orders were sent. The tribunal held this as a sufficient cause under Section 253(5) of the Income Tax Act, 1961, for condoning the delay.

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The tribunal held that the penalty orders could not be decided separately at this stage, since the quantum proceedings had already been sent back to the AO for a fresh decision.

The Tribunal thus quashed the existing penalty orders and remitted the matter back to the AO, granting liberty to initiate fresh penalty proceedings after reassessment, if warranted.

To Read the full text of the Order CLICK HERE

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