Non issuance of Notice prevented Assessee from Reasonable Opportunity of being Heard Resulting in Violation of Natural Justice: ITAT directs Readjudication [Read Order]

The Chennai bench of the Income Tax Appellate (ITAT) Tribunal held that no notice to the registered e-mail ID of the assessee as per the PAN data base/ Income Tax Web Portal was issued is in gross violation of principles of natural justice and provisions of the Income Tax Act and the assessee shall be afforded reasonable opportunity of being heard to substantiate his claim.

The assessee had not filed return of income for the assessment year 2017-18. The case was selected under NMS category as potential case for enquiry where return of income has not been filed. As per the information available in SFT, the assessee has made cash deposits in Axis Bank, Ayanavaram Branch, Chennai during the demonetization period to the extent of ₹.34,76,000/-.

In the absence of proper explanation or response from the assessee, the Assessing Officer has completed the assessment under section 144 of the Act dated 28.11.2019 by assessing total income of the assessee at ₹.37.82,720/- after treating the cash deposit during demonetization period of ₹.34,76,000/- as unexplained investment under section 69 of the Act. On appeal, the  CIT(A) dismissed the appeal since there was no response from the assessee. Aggrieved, the assessee appealed before the tribunal.

After hearing both the parties, the tribunal held that no notice to the registered e-mail ID of the assessee as per the PAN data base/ Income Tax Web Portal was issued in gross violation of principles of natural justice and provisions of the Income Tax Act and the assessee shall be afforded reasonable opportunity of being heard to substantiate his claim.

The two member bench consisting of Manoj Kumar Aggarwal (Accountant member) and V.Durga Rao (Judicial member) set aside the appellate order and remit the matter back to the file of the  CIT(A) to decide the issue afresh in accordance with law by issuing notice to the registered e-mail ID of the assessee enabling the assessee to substantiate his claim with supporting evidences.

The assessee is also directed to furnish convincing explanation with supporting evidences before the  CIT(A) for consideration. Thus the appeal was allowed.

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