ITAT Sets Aside Penalty Order, Cites Denial of Fair Hearing Due to Improper E-Notice Delivery [Read Order]
During proceedings before the tribunal, Husain's representatives argued that their client had specifically opted out of email communication in the appeal form (Form-35) filed with the Commissioner of Income Tax (Appeals).
![ITAT Sets Aside Penalty Order, Cites Denial of Fair Hearing Due to Improper E-Notice Delivery [Read Order]](https://images.taxscan.in/h-upload/2025/06/23/2053117-d0358ca8-9bcc-47a4-aadb-5f709f3e4963.webp "ITAT Sets Aside Penalty Order, Cites Denial of Fair Hearing Due to Improper E-Notice Delivery [Read Order]")
The Income Tax Appellate Tribunal (ITAT) Lucknow has canceled a penalty order against a Raebareli taxpayer, ruling that authorities failed to provide a fair hearing by ignoring the assessee's request to avoid email communications. The tribunal directed tax officials to re-examine the case after proper notice delivery, emphasizing the importance of accommodating taxpayers'...
The Income Tax Appellate Tribunal (ITAT) Lucknow has canceled a penalty order against a Raebareli taxpayer, ruling that authorities failed to provide a fair hearing by ignoring the assessee's request to avoid email communications. The tribunal directed tax officials to re-examine the case after proper notice delivery, emphasizing the importance of accommodating taxpayers' communication preferences.
The case involves Mohd Husain, a resident of Murar Mau in Raebareli, who was slapped with a ₹3.34 lakh penalty under Section 270A of the Income Tax Act for the 2017-18 assessment year. The dispute arose when tax authorities imposed the penalty and subsequently dismissed Husain's appeal, despite his clear request to receive notices through physical channels rather than email.
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During proceedings before the tribunal, Husain's representatives argued that their client had specifically opted out of email communication in the appeal form (Form-35) filed with the Commissioner of Income Tax (Appeals). Despite this explicit request, the CIT(A) sent all notices exclusively via email and rushed through the appeal process, issuing just two notices on February 6 and 15, 2023, before passing the final order on February 21, 2023.
Judicial Member Sudhanshu Srivastava and Accountant Member Anadee Nath Misshra found multiple procedural lapses in the case. They noted that both the Assessing Officer and the CIT(A) failed to provide reasonable opportunities for the taxpayer to present his case. The tribunal observed that the authorities' insistence on digital communication, despite the assessee's declared preference for physical notices, amounted to a denial of natural justice.
The ITAT order highlights how the rushed proceedings gave Husain insufficient time to respond, with barely five days between the last notice and the final order. The tribunal also pointed out that the original penalty order from September 2022 was passed without proper hearings, compounding the procedural unfairness.
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In their February 25, 2025 ruling, Members Srivastava and Misshra set aside both the penalty order and the CIT(A)'s dismissal, directing the Assessing Officer to conduct fresh proceedings. The tribunal emphasized that tax authorities must respect taxpayers' communication preferences and provide adequate response time, especially in penalty cases that carry significant financial consequences.
The decision serves as an important reminder to tax officials about maintaining procedural fairness in the digital age, particularly when dealing with taxpayers who may not be comfortable with electronic communications. The fresh proceedings will give Husain a proper opportunity to defend against the penalty allegations through his preferred communication channels.
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