The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the non-compliance of e-notice due to non-reaching to the concerned officer as the employee handling the matter had left the company was a reasonable cause.
The assessee, Egis International S.A. was a foreign company incorporated in India. Its principal business is to provide technical consultancy services to its associate enterprises as well as unrelated third parties. For AY 2016-17, it filed its return on 30.11.2016 declaring income. The case was selected for scrutiny under CASS. Statutory notices were served online upon the assessee which were responded to. The assessee had offered its income in India on a net basis.
The Assessing Officer (AO) referred the case to the Transfer Pricing Officer (TPO) who passed an order under Section 92CA(3) of the Income Tax Act, 1961 proposing the cumulative adjustment. Accordingly, the AO served upon the assessee a draft assessment order requiring the assessee to submit its response under Section 144C(2) of the Income Tax Act.
The assessee neither filed any objections before Hon’ble DRP nor submitted any reply to the AO within the stipulated period. The AO therefore proceeded to pass the final order and completed the assessment on 17.02.2020 under section 143(3) r.w. Section 144C(3) of the Act on total income including therein cumulative adjustment under Section 92CA of the Income Tax Act.
Nageswar Rao, on behalf of the assessee submitted that non-compliance of notice(s) issued by the CIT(A) happened due to the fact that the employee handling the matter had left the company. An affidavit sworn by Sunil Kumar Wasan, an authorised signatory of the assessee company on 06.04.2023 had been filed before us which was kept on record.
He further submitted that hearing notices issued by the CIT(A) were not received by the assessee in its office; that the e-mail address to which notices were sent belonged to
Gaurav Sharma who had left the company and notices, if any, sent to his email had not reached the concerned officials of the assessee and non-compliance was not deliberate.
Manu Chaurasia on behalf of the revenue vehemently opposed and submitted a bunch of notices issued by the office of the CIT(A) and pointed out that the notices had been served electronically to the e-filing account of the assessee.
The two-member Bench of Balaganesh, (Accountant Member) and Astha Chandra, (Judicial Member) allowed the appeal filed by the assessee holding that the CIT(A) had not passed ex-parte order on merits of the case and the non-compliance was
not deliberate
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