Atida Agrawal Vs The ITO (ITAT Jaipur)
Mere Issuance of E-Notices Is Not Enough—Service Must Be Established: ITAT Condones 449-Day Delay Caused by Matrimonial Litigation
Summary: The Jaipur Bench of the Income Tax Appellate Tribunal has held that merely generating or issuing hearing notices electronically is not sufficient to establish that an assessee was granted a reasonable opportunity of hearing. Where the assessee did not respond to repeated electronic notices, the appellate authority ought to have verified whether the notices were actually served and, in the facts of the case, attempted service through an alternative or physical mode.
The Tribunal also accepted matrimonial litigation and non-awareness of the appellate order as sufficient cause and condoned a substantial delay of 449 days in filing the appeal.
Facts of the case
The Income-tax Department received information from the Sub-Registrar that an immovable property had been sold for ₹18 lakh under a sale deed dated 30 March 2012. The property’s stamp-duty value was ₹23,27,386.
Since no corresponding capital gain was found in the original return filed on 28 March 2013, the assessment was reopened by issuing notice under Section 148.
The assessee did not appear or furnish the required explanation during the reassessment proceedings. The Assessing Officer consequently completed the assessment ex parte and made the following additions:
- ₹23,27,387 as short-term capital gain;
- ₹11,608 by disallowing expenses claimed against LIC commission income; and
- ₹1 lakh by disallowing Chapter VI-A deductions.
The total income was assessed at ₹27,25,970.
Appeal dismissed for non-prosecution
The assessee challenged the reassessment before the first appellate authority.
One of the assessee’s principal contentions was that the property was not sold by the assessee but by M/s Safe Infraprojects Pvt. Ltd. The registered sale deed and the company’s balance sheet, allegedly reflecting the sale, were filed as additional evidence along with Form 35.
However, the CIT(A) issued hearing notices on 10 September 2024, 19 September 2024 and 3 October 2024. As no response was received, the appeal was dismissed for non-prosecution on 17 October 2024 without adjudicating the additions on merits.
The assessee filed an appeal before the Tribunal with a delay of 449 days.
Explanation for the delay
The assessee explained that the marriage had taken place on 24 December 2021. Matrimonial disputes arose approximately one and a half years later, and the assessee began residing separately with the parents from 10 April 2023. A decree of divorce was eventually passed on 16 January 2025.
It was contended that the assessee was preoccupied with matrimonial proceedings and was unaware of the notices and the appellate order.
The assessee also stated that the hearing notices allegedly issued by the CIT(A) were never received. The notices had not been sent to the email address mentioned on the e-filing portal or in Form 35.
The assessee became aware of the appellate order only after the Assessing Officer passed a penalty order under Section 271(1)(c) on 11 March 2026. An intimation concerning the penalty order was received on the mobile number of the assessee’s father. The message was forwarded to a Chartered Accountant, who examined the e-filing portal and discovered the appellate order dated 17 October 2024.
The appeal before the Tribunal was thereafter filed.
Revenue’s opposition
The Revenue opposed the condonation application by contending that all the hearing notices had been issued to the assessee through email. According to the Department, the assessee failed to appear despite adequate opportunities and could not rely upon such non-compliance to seek condonation of a delay of 449 days.
Findings on condonation of delay
The Tribunal noticed that the CIT(A) had issued three notices within a short span of 23 days. The notices were separated by intervals of merely nine or ten days.
However, the appellate order did not establish that the notices were actually served upon the assessee. It recorded only their issuance.
The Tribunal further accepted that the assessee became aware of the proceedings after the penalty intimation was received on the father’s mobile number in March 2026.
It also considered the assessee’s involvement in matrimonial litigation immediately after a short period of marriage. The Tribunal held that such personal circumstances could naturally command the individual’s entire attention and constituted sufficient cause for the delay.
Adopting a liberal interpretation of the provisions governing condonation, the Tribunal condoned the delay of 449 days.
Issuance and service are different
On examining the CIT(A)’s order, the Tribunal found no evidence establishing actual service of the notices.
The Tribunal held that mere issuance of notices is not sufficient; service must be ensured so that the assessee receives a real and reasonable opportunity of hearing.
It observed that where repeated digital notices did not evoke any response, the CIT(A) ought to have attempted service through physical or another effective mode before concluding that the assessee was not interested in pursuing the appeal.
Since no reasonable opportunity had been established, the ex parte appellate order was held unsustainable.
The order was accordingly set aside, and the entire appeal was restored to the CIT(A) for fresh adjudication after providing the assessee a reasonable opportunity of hearing. The appeal was treated as allowed for statistical purposes.
No decision on the underlying additions
The Tribunal did not decide whether the property belonged to the assessee or M/s Safe Infraprojects Pvt. Ltd. It also did not delete the additions towards capital gains, LIC commission expenses or Chapter VI-A deductions.
All these issues remain open before the CIT(A). The assessee must establish the ownership and transfer of the property through the registered deed, company records, bank statements and financial statements.
Author’s comments
The decision draws an important distinction between issuance of an electronic notice and effective service of that notice. A faceless or digital proceeding cannot become a mechanical exercise where notices are uploaded in quick succession and the appeal is dismissed without verifying whether the taxpayer actually received them.
At the same time, the ruling should not be read as laying down that electronic service is invalid or that physical service is mandatory in every case. Electronic service effected in accordance with the Act and prescribed procedure is legally recognised. The crucial question is whether the record establishes valid service and whether the opportunity granted was reasonable in the circumstances.
The condonation of 449 days is also fact-specific. The assessee explained the matrimonial dispute, separation, divorce proceedings, lack of knowledge of the appellate order and the precise event through which the order was discovered. These circumstances collectively persuaded the Tribunal to adopt a liberal approach.
The ruling reinforces the principle that procedural delays should not defeat substantial justice where the explanation is bona fide and the assessee has an arguable case on merits.
The decisive proposition is that a taxpayer may be proceeded against ex parte after valid service and reasonable opportunity, but an appeal cannot be dismissed merely because notices were generated on the portal without proof that they were effectively served.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT JAIPUR “SMC” BENCH, JAIPUR
The Appellant, Atida Agrawal (hereinafter referred to as the ‘assessee’) by filing the present appeal, sought to set aside the impugned order dated 17.10.2024 passed by the Additional/Joint Commissioner of Income Tax (Appeals)-1 Noida [hereinafter referred to as the ‘JCIT(A)’] qua assessment year 2012-13 on the grounds inter-alia that:-
“1. The Ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal filed by the assessee by holding that assessee is not interested in pursuing the appeal without providing adequate opportunity of hearing in as much as the hearing notices dt. 10.09.2024, 19.09.2024 & 03.10.2024 were not sent on the e-mail id mentioned in the e-filing portal or Form No. 35.
2. The Ld. CIT(A), NFAC has erred on facts and in law in not deciding the appeal on merit even when registry of plot and balance sheet of M/s Safe Infraprojects Pvt. Ltd. who has disclosed this sale was filed as addition evidence along with Form No. 35.
3. The appellant craves to alter, amend and modify any ground of appeal.
4. Necessary cost be awarded to the assessee.”
2. Briefly stated, facts necessary for consideration and adjudication of the issues at hand are : On the basis of information received from the Sub Registrar that the assessee has sold immovable property for sale consideration of Rs. 18,00,000/- with stamp valuation at Rs. 23,27,386/- by virtue of the sale deed dated 30.03.2012 and no capital gain has been declared in the original ITR filed on 28.03.2013. Assessment was reopened by initiating proceedings u/s 148 of the Act. On failure of the assessee to appear and make his submissions, the Assessing Officer proceeded to make addition of Rs. 23,27,387/- on account of short term capital gain, by making addition of Rs. 11,608/- on account of disallowance of deductions claimed out of LIC Commission and disallowance of deduction to the tune of Rs. 1,00,000/- under chapter VI-A of the Income Tax Act and thereby framed total assessment at Rs. 27,25,970/-.
3. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal, who has dismissed the appeal for want of non prosecution by the assessee. Being aggrieved with the impugned order passed by the Ld. CIT(A), assessee has come up before the Tribunal by way of filing the present appeal.
4. At the very outset, Ld. AR for the assessee on the basis of application for condonation of delay, sought to condone the delay of 449 days in filing the present appeal on the grounds inter-alia that assessee got married on 24.12.2021, but immediately after 1.5 years of his marriage dispute arose and since 10.04.2023, he is residing separately with his parent and subsequently decree of divorce was passed on 16.01.2025; that all the four notices claimed to have been issued by the Ld. CIT(A) within a period of 23 days have not been received by the assessee and as such question of attending proceedings before first appellate authority does not arise; that on 11.03.2026, the Assessing Officer passed a penalty order u/s 271(1)(c) of the Act for which information was received on mobile number of Shri Akhilesh Agrawal father of the assessee; that he forwarded the said message to his Chartered Accountant, Shir Lalit Jain, who have browsed e-filing portal and came to know about the impugned order passed on 17.10.2024 and thereafter the appeal was filed.
5. However on the other hand, Ld. DR for the Revenue opposed the application for condonation of delay on the grounds that all the four notices have been issued to the assessee on his email, but he has not preferred to put in appearance.
6. When we examine the reasons put forth by the assessee for condonation of delay in the light of the facts that within a period of 23 days three notices were issued i.e. on 10.09.2024, 19.09.2024 and 03.10.2024, but it is nowhere mentioned if said notices were ever served upon the assessee. Even otherwise to provide reasonable opportunity of being heard Ld. CIT(A) is required to get the service of the assessee affected through physical mode when no response was received to the notices issued through digital mode. It is also proved on record that when the assessee received notice on the mobile number of his father regarding penalty order dated 11.03.2026 u/s 271(1)(c) of the Act and thereafter he came to know about the impugned order.
7. Moreover when a person is entangled in the matrimonial litigation just after 1.5 years of his marriage solemnized on 24.12.202, the entire focus ought to be on the litigation and it is also a “sufficient cause” to condone the delay.
8. In the totality of the circumstances and giving liberal interpretation to the provisions for condonation of delay of 449 days in filing the appeal before the Tribunal is hereby condoned. The appeal is being heard on merits.
9. We have heard Ld. ARs for the assessee and Ld. DR for the Revenue and perused the record available on file.
10. Bare perusal of the impugned order passed by Ld. CIT(A) particularly para 2 shows that four notices were issued to the assessee out of which three notices were issued with gap of 9 to 10 days and it is not brought on record if on not responding to the notices, service through physical mode was affected or not. Mere issuance of the notices are not enough rather service of the notice is required to be ensured to provide reasonable opportunity of being heard. So when the assessee has not been provided with reasonable opportunity of being heard, the impugned order passed by the Ld. CIT(A) is not sustainable in the eyes of law, hence set aside.
11. Resultantly, the appeal filed by the assessee is hereby allowed for statistical purposes to be decided afresh after providing reasonable opportunity of being heard by the Ld. CIT(A).
Order pronounced in the open court on 10-09-2026 .
