Notice Issued in wrong Email Id: ITAT Grants Opportunity to Substantiate Cash Deposit and Property Purchase [Read Order]

Vinayak Bahiru Medge (assessee) faced assessment proceedings for the relevant assessment year after the Assessing Officer (AO) issued a notice under Section 148 of the Income Tax Act, 1961.

The AO observed that the assessee had made cash deposits of Rs. 37,14,640 and purchased an immovable property for Rs. 34,40,000, the sources of which remained unexplained due to the assessee’s non-compliance with multiple notices. The AO completed the assessment determining the total income at Rs. 71,14,640.

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Aggrieved by the AO’s order, the assessee appealed to the CIT(A). Despite several opportunities, there was no compliance from the assessee, leading the CIT(A) to dismiss the appeal for want of prosecution.

The assessee then appealed to the ITAT, contending that the notices issued by the CIT(A) were sent to an outdated email ID, contrary to the updated email ID provided in Form No. 35.

The assessee’s counsel argued that the non-compliance was due to the notices being sent to the wrong email ID, and given an opportunity, the assessee could substantiate the source of the cash deposits and property purchase with requisite details.

The Revenue counsel argued that the assessee had consistently failed to appear before both the AO and the CIT(A) and in the absence of any explanation for the cash deposits and property purchase, the CIT(A) order should be upheld.

The two-member bench, comprising Astha Chandra (Judicial Member) and Rama Kanta Panda (Vice President), observed that the assessee’s non-compliance before the CIT(A) was due to notices being sent to an incorrect email ID.

The Tribunal observed the assessee’s submission that the correct email ID was provided in Form No. 35, and the failure to receive notices hindered their ability to respond. It restored the appeal to the file of the CIT(A) with a direction to grant the assessee one more opportunity to substantiate their case.

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The Bench also directed the assessee to provide the requisite details on the appointed date without seeking adjournments, failing which the CIT(A) could pass an appropriate order as per law. The appeal filed by the assessee was allowed for statistical purposes.

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