ITAT Directs Fresh Assessment in Petrol Pump Case, Cites Denial of Natural Justice Over Electronic Notices [Read Order]

The Income Tax Appellate Tribunal (ITAT) Lucknow Bench has ordered tax authorities to conduct a fresh assessment in the case of a Kanpur petrol pump owner, ruling that the taxpayer's right to natural justice was violated through improper delivery of electronic notices. The decision comes after the tribunal found that the assessee's limited technical proficiency prevented him from accessing crucial digital communications during the proceedings.

The case involves Ashok Kumar, a Kanpur-based businessman who transferred ownership of his Indian Oil petrol pump in August 2018. Tax authorities had assessed his income at ₹4.44 crore for the 2018-19 assessment year, but Kumar contended that he was not actively involved in the business operations during the transition period. His appeal highlighted multiple procedural issues, including his inability to access digital notices and challenges in submitting required documentation.

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During the hearing, Kumar's representatives argued that the exclusive reliance on electronic notices created an unfair disadvantage for their client, who lacked the technical skills to navigate the digital platforms.

They referenced the Salem Advocate Bar Association case (2003) to emphasize that legal processes must ensure all parties can effectively participate, regardless of their technological capabilities. The tribunal noted that while electronic notices are valid as established in the Rasiklal Manikchand Dhariwal ruling (1974), authorities must make reasonable accommodations for those unable to use such systems.

Judicial Member Anadee Nath Misshra and Vice President Kul Bharat observed that Kumar had made genuine attempts to comply with the proceedings but was hindered by unclear communication methods and his limited digital literacy. The tribunal found that tax authorities failed to provide alternative means of communication despite being aware of the taxpayer's circumstances, effectively denying him a fair opportunity to present his case.

The ITAT's order directs the Assessing Officer to re-examine the case with proper notice delivery and consider all documentation that Kumar was previously unable to submit. The tribunal emphasized that while digital transformation of tax administration is important, it should not come at the cost of fundamental principles of natural justice. The ruling gives Kumar another opportunity to substantiate his claims regarding the petrol pump transfer and related financial matters.

The decision underscores the need for tax authorities to balance technological efficiency with the practical realities of taxpayers' varying capabilities to ensure equitable administration of justice.

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