Notices uploaded only on Income Tax Portal may not be Treated as Valid Service of Notice: ITAT quashes Reassessment Proceedings against Buddhist monk [Read Order]

The Chandigarh bench of Income Tax Appellate Tribunal ( ITAT ) quashed reassessment proceedings initiated against, ruling that the issuance of notices solely through the Income Tax portal may not constitute valid service of notice.

The appeal was filed against an order dated 06.01.2024, issued by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The Assessee raised multiple grounds, including the invalidity of the reassessment due to improper service of notice under section 148 of the Income Tax Act, 1961, and the breach of limitations prescribed under section 149(1)(b) of the Act.

The Assessee, a Buddhist monk residing in a remote village in Himachal Pradesh, was targeted for reassessment after depositing ₹6,02,000 during the demonetization period. The Income Tax Department issued a notice under section 148 on 31.03.2021, which was uploaded on the ITBA portal but not served through email or post.

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Due to his limited internet access and unfamiliarity with the process, the Assessee was unaware of the notice and did not respond. Subsequently, an ex parte order was passed under section 144 read with section 147 of the Act, adding the deposits and other income sources, such as interest and teaching income, to the Assessee’s total income.

Aggrieved by the assessment, the Assessee appealed, arguing that the reopening of assessment was invalid due to improper service of notice and failure to follow the guidelines set by the Supreme Court in Union of India v. Ashish Agarwal (2022). The Assessee also claimed that the assessment order violated principles of natural justice, as he was not provided with a reasonable opportunity to be heard.

The bench of Krinwant Sahay (Accountant member)  and AD Jain ( Judicial member) reviewed the case and noted that all notices were merely uploaded on the ITBA portal, with no attempt to serve them through registered email or post.

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Referring to a recent decision by the Punjab & Haryana High Court in Munjal BCU Centre of Innovation and Entrepreneurship vs. CIT (2024), the tribunal held that service of notice solely through the portal cannot be considered valid.

Based on this finding, the ITAT quashed the reassessment proceedings, allowing the appeal. 

To Read the full text of the Order CLICK HERE

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