Email Notice Sent to ID Not Cited in Form 35: ITAT Remits Matter Noting Sufficient Cause for Non-Compliance [Read Order]

The Raipur Bench of the Income Tax Appellate Tribunal ( ITAT ) remitted the matter to the Commissioner of Income Tax (Appeals) [ CIT(A) ] ruling that notices were sent to an incorrect email ID which was not mentioned in Form 35 constitute a sufficient cause for non-compliance.

Dinesh Kumar Mishra (assessee), a partnership firm in the transport business, was subjected to reassessment proceedings for the assessment year 2013-14. The Assessing Officer (AO) initiated action under Section 147 of the Income Tax Act, 1961.

The AO noted several transactions including cash deposits of Rs. 66,00,000/- in a savings account, Rs. 29,00,000/- in time deposits, and TDS deductions of Rs. 21,92,390/- under Section 194C and Rs. 9,26,829/- under Section 194A of the Income Tax Act.

A notice was issued and later the assessee filed a return on 18.12.2016 with unaudited financial statements. The AO made ad hoc disallowances due to unverifiable, handwritten vouchers totalling to Rs. 1,72,49,396/-.

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Aggrieved by the AO’s order, the assessee appealed to the CIT(A). The CIT(A) dismissed the appeal citing the assessee’s failure to respond to hearing notices. Aggrieved by the CIT(A)’s order, the assessee appealed to the ITAT,

The assessee contended that the CIT(A) sent notices to an incorrect email ID (chitratinfc2542@gmail.com) instead of the one provided in Form 35 (capankajssm@gmail.com). The assessee submitted copies of Form 35 and ITBA portal screenshots to support this claim.

The two-member bench comprising Partha Sarathi Chaudhury (Judicial Member) and Arun Khodpia (Accountant Member), observed that the CIT(A)’s use of an incorrect email ID resulted in an ex-parte order that violated natural justice principles.

The bench noted a sufficient cause for the assessee’s non-compliance due to this procedural error. It relied on its earlier decision in Brajesh Singh Bhadoria vs. Dy/Asst. Commissioner of Income Tax which remanded a similar case for fresh adjudication due to non-compliance caused by procedural lapses.

The tribunal set aside the CIT(A)’s order and remanded the matter to the CIT(A) for fresh adjudication. It directed to grant the assessee a reasonable opportunity to be heard. It also directed the CIT(A) to pass an order within three months of receiving the ITAT’s order.

The bench directed the assessee to cooperate proactively, with the CIT(A) authorized to decide the case per law if compliance failed. It dismissed the Revenue’s arguments. The appeal of the assessee was allowed for statistical purposes.

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