ITAT Sets Aside Ex-Parte CIT(A) Order Due to Invalid Notice Service [Read Order]

The Income Tax Appellate Tribunal (ITAT), Raipur Bench, has set aside an ex-parte appellate order for the Assessment Year 2011–12, citing improper service of notice as the primary reason for non-participation by the appellant during the proceedings before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre.

In the second appeal, Pramila Gokuldas Daga Girls College, a registered trust, challenged the order passed by the CIT(A) which upheld the additions made by the Assessing Officer, treating Rs.77,27,120 in cash deposits and Rs.33,347 in fixed deposit interest as unexplained income. The assessment had been completed under Section 147 read with Section 144 of the Income Tax Act, 1961, following the failure of the assessee to respond to a notice issued under Section 148. The Assessing Officer framed the assessment on 9 October 2018, in absence of any return or explanation from the assessee.

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The appeal before the CIT(A) was also dismissed ex-parte. It was argued before the Tribunal that the appellant had, in its memorandum of appeal (Form 35), explicitly opted out of receiving notices or communications via email. It was submitted that the notices were not served physically, and therefore the appellant remained unaware of the hearing dates before the first appellate authority.

The Tribunal found merit in this contention. It noted that while the CIT(A) proceeded with the appeal ex-parte citing non-attendance, the service of hearing notices exclusively via email violated the service preference opted by the assessee. The Bench accepted that the appellant’s absence resulted from the department's failure to serve notices in accordance with the selected mode of communication.

Ravish Sood (Judicial Member) and Arun Khodpia (Accountant Member) observed that the assessee had been denied a fair opportunity to present its case and that the procedural lapse was not attributable to the assessee. The Tribunal restored the matter to the file of the CIT(A) with instructions to re-adjudicate the appeal after validly notifying the assessee and giving it a reasonable opportunity to be heard.

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In Conclusion, the appeal was accordingly allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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