Taxpayer fails to Opt for Email Notice in Form-35: ITAT Restores Matter for Fresh Adjudication [Read Order]

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) set aside the ex-parte order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] and restored the matter for fresh adjudication, citing that the assessee had specifically opted out of receiving notices via email in Form-35.

M/s. Shri Mangalam Traders (assessee) engaged in the business of rice milling, had filed its income tax return for the Assessment Year (AY) 2016-17 declaring an income of Rs. 1,07,730. The case was selected for scrutiny, and the Assessing Officer (AO) completed the assessment and made an addition of Rs. 19,91,000/- on account of bogus purchases from four parties.

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Aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A) but the assessee failed to appear for hearings. After providing four opportunities, the CIT(A) dismissed the appeal for non-prosecution.

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Aggrieved by the order of the CIT(A), the assessee filed an appeal before the ITAT. The counsel for the assessee, argued that the CIT(A) had dismissed the appeal without validly notifying the assessee of the hearings.

The counsel submitted that in Form-35, the assessee had specifically opted out of receiving notices via email. The counsel further argued that all four notices were sent electronically through the ITBA system.

The counsel for the revenue supported the order of the CIT(A). The counsel also stated that multiple opportunities were provided, but the assessee remained non-compliant to the notices.

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After reviewing Form-35, the single-member bench of Shri Ravish Sood (Judicial Member) observed that the taxpayer had been deprived of an opportunity to present its case due to a procedural lapse in notice service.

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Therefore, the tribunal held that since the assessee was unaware of the proceedings due to improper service of notice, the ex-parte order of the CIT(A) was liable to be set aside. The tribunal directed the CIT(A) to re-adjudicate the matter afresh.

The tribunal also directed the CIT(A) to ensure a fair hearing for the assessee. Thereby the appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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