ITAT Indore Sets Aside Ex Parte CIT(A) Order for Notices Sent to Wrong Email

Sourabh Kochetta Vs ITO (ITAT Indore)

Summary: The Income Tax Appellate Tribunal (ITAT), Indore Bench, in Sourabh Kochetta Vs ITO, set aside an ex parte order passed by the Commissioner of Income Tax (Appeals) after finding that hearing notices were sent to email addresses different from the address specifically provided by the assessee in Form No. 35. The Tribunal, comprising Judicial Member Shri Paresh M. Joshi and Accountant Member Shri Arvind Soni, held that the appellate order had been passed without providing the assessee an effective opportunity of hearing, thereby violating the principles of natural justice. The dispute related to Assessment Year 2017-18 and involved an addition of Rs. 18,40,057 under Section 69A read with Section 115BBE of the Income-tax Act, 1961.

The assessee had declared total income of Rs. 3,49,090, whereas the Assessing Officer, through an assessment order dated 26 December 2019 under Section 143(3), assessed income at Rs. 21,89,150 after treating Rs. 18,40,057 as unexplained money. Aggrieved by the assessment, the assessee preferred an appeal before the CIT(A). However, the CIT(A), by order dated 2 September 2025, dismissed the appeal after observing that the assessee had failed to furnish written submissions, documentary evidence or explanations despite six hearing notices issued between January 2021 and August 2025. The appellate authority concluded that the assessee had not substantiated the grounds of appeal and that sufficient material was unavailable to grant relief.

Before the Tribunal, the assessee challenged the ex parte appellate order on the ground that none of the hearing notices had been sent to the email address mentioned in Form No. 35. The authorised representative demonstrated that the prescribed email address was [email protected], whereas the notices had been issued to [email protected] and [email protected]. Documentary records relating to all six notices were placed before the Tribunal to establish the discrepancy. The assessee further submitted that he had remained in judicial custody from 7 January 2023 to 8 March 2025 and had subsequently been acquitted by the court. It was argued that the dismissal of the appeal without proper service of hearing notices was contrary to the principles of natural justice and warranted fresh adjudication.

The Tribunal also considered the delay of 22 days recorded by its Registry in filing the second appeal. The assessee filed an affidavit dated 12 October 2026 explaining that he became aware of the CIT(A)’s order only on 6 December 2025, upon issuance of a penalty notice. The Departmental Representative neither opposed the request for condonation nor disputed the contents of the affidavit, leaving the matter to the Tribunal’s discretion. After examining the affidavit and hearing both parties, the Tribunal held that sufficient cause had been demonstrated for the delay. Accordingly, the delay of 22 days was condoned and the appeal was admitted for adjudication.

After examining the records and rival submissions, the Tribunal observed that the notices issued under Section 250 had not been served at the email address furnished by the assessee in Form No. 35. It consequently held that the CIT(A)’s order was ex parte in nature and had been passed without hearing the assessee. The Tribunal set aside the appellate order and remanded the matter to the CIT(A) for de novo adjudication, directing the appellate authority to pass a speaking and well-reasoned order. The assessee’s appeal was allowed for statistical purposes. Importantly, the Tribunal did not adjudicate the merits of the addition of Rs. 18,40,057 under Section 69A or the applicability of Section 115BBE, leaving those issues open for fresh consideration by the CIT(A).

Appellant Was Represented By:  Sh. Milind Wadhwani, CA & Ms. Shradha Piplodia

FULL TEXT OF THE ORDER OF ITAT INDORE

This is an Appeal filed by the Revenue under section 253 of the Income tax Act 1961,[ herein after referred to as the Act for the sake of brevity] before this tribunal. The Revenue is aggrieved by the order bearing No:-ITBA/APL /S/250/2025­26/1080268412(1) dated 02.09.2025 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred as the “Impugned Order”. The Relevant Assessment Year is 2017-2018 and the corresponding Previous Period is from 01/04/2016 to 31/03/2017.

2. FACTUAL MATRIX

2.1 That as and by way of an Assessment Order made u/s 143(3) of the Act, the total income of the assessee was computed and assessed at Rs. 21,89,150/- [RO]. The Income as per the return of the income was at Rs. 3,49,090/-. The addition of Rs. 18,40,057/- was made on the account of unexplained money under section 69A read with section 115 BBE of the act. That the aforesaid assessment order bears No. ITBA/AST/S/143(3)/2019-20/1023181428(1) and that the same is dated 26.12.2019 which is herein after referred to as the “Impugned assessment order”.

2.2 That the Assessee being Aggrieved by the aforesaid “Impugned Assessment Order” prefers the first appeal u/s 246A of the Act before the Ld. CIT (A) who by the “Impugned Order” has dismissed the first appeal of the Assessee on the grounds & the reasons stated therein. The core grounds & the reasons for the dismissal the first appeal was as under:-

6 Decision:

In this case, during the appellate proceedings, the contents filed by the appellant in Form 35 have been perused. The appellant has filed form 35 along with grounds of appeal. The same have been perused which were not sufficient to decide the appeal of the appellant, therefore the appellant were given multiple opportunities to file written submission to substantiate his grounds of appeal. The notices were issued electronically through ITBA, but the appellant has failed to comply with the same. He had neither made any compliance/submissions in response to the notices issued and sought for adjournment one time and thereafter remained non-compliant. The details of the notices issued are as under.

6.1. The available material on record is verified along with grounds of appeals and statement of facts. After considering the material available on record, it is seen that no sufficient material is available to provide any relief to the appellant. If the appellant would have submitted some information and some documents, the case would have been decided on merits. Therefore, under such circumstances it is not possible to allow any relief to the appellant.

6.2.9. In view of the facts and legal position discussed above, it is presumed that appellant is not interested in pursuing the appeal and not producing any documents, explanation and evidence in support of grounds of appeal raised and thus has not discharged the onus to substantiate the grounds. It is seen that no written submission filed till date despite multiple opportunities. In view of the lack of prosecution by the appellant, I proceed to decide the appeal in view of the discussion made above.

6.3. The appellant has failed to furnish any material evidences or documents or even the written submission either with its appeal or during the appellate proceedings to substantiate the grounds of appeal. In view of the discussions in the preceding paras, the clear position of law and respectfully relying upon the judgments of Hon’ble High Courts as above I do not find merit in the grounds of appeal. Therefore, the appeal is dismissed on this count.

6.4. In the result, appeal of the appellant is dismissed.

2.3 That the Assessee being aggrieved by the “Impugned Order” has preferred the Instant Second Appeal before this Tribunal & has raised the following grounds of appeal in the form No: -36 against the “Impugned Order” which are as under: –

1. On the facts and circumstances of the case and in law, the assessment order dated 26.12.2019 is bad in law, without jurisdiction, and liable to be quashed. 2. On the facts and circumstances of the case and in law, the additions are made on mere conjectures, surmises and suspicions.

2. On the facts and circumstances of the case and in law, the assessment was completed without complying with the statutory requirements of law. 4. On the facts and circumstances of the case and in law, the assessment order dated 26.12.2019 is contrary to law, facts and circumstances of the case and in any case is opposed to the principles of equity, natural justice and fair play.

3. On the facts and circumstances of the case and in law, that the Ld. JCIT-(A) erred in upholding the addition, made by Ld. AO on issue beyond the Scope of limited scrutiny. 6. On the facts and circumstances of the case and in law, the Ld. JCIT-(A) erred in not holding that the ld. AO had travelled beyond his jurisdiction, rendering the assessment order illegal, void ab initio and unsustainable.

4. On the facts and circumstances of the case and in law, The Ld. JCIT-(A) erred in upholding the action of Ld. AO in making an addition of Rs. 18,40,057/- as unexplained money u/s. 69A. 8. On the facts and circumstances of the case and in law, the Ld. NFAC erred in applying the provisions of section 115BBE at a higher rate of tax.

5. On the facts and circumstances of the case and in law, the provisions of Section 69A cannot be invoked. 10. On the facts and circumstances of the case and in law, the provisions of section 115BBE can not be invoked.

6. On the facts and circumstances of the case and in law, the initiation of penalty proceedings under Section 271AAC is bad in law. 12. For that the appellant craves leave to add, amend, alter vary and OR withdraw any CR. all the above grounds of appeal.

7. HUMBLE PRAYERS For these grounds and such other grounds that may be urged before OR during the hearing of the appeal it utmost humbly prayed that this respected authority may be pleased to: 1. Quash the reassessment order dated 26.12.2019. 2. DLEETE the addition of Rs. 18,40,057/- u/s. 69A. 3. Hold that the provisions of section 69A are not invokable. 4. Hold that provisions of section 115BBE are not invokable 5. DLEETE the interest levied under Sections 234B, 234C, and 234D 6. Accept the returned income as filed by the appellant. 7. DROP the penalty proceedings initiated under Sections 271AAC. 8. Any other relief that may be deemed fit and proper by this Honble Tribunal.

3. Record of Hearing

3.1 The hearing in the matter took place before this Tribunal on 21/10/2026, when the Ld AR for and on the behalf of the Assessee appeared before us & Interalia contended that the “Impugned Order” is bad in law, illegal & not Proper. It is in the violation of the principles of natural justice. It therefore deserves to be set aside.

3.2 The Ld. AR has placed on the record of this Tribunal a PB from pages 29 to 38 in support along with appeal memo from pages 1 to 28. In addition, the Ld. AR has placed on the record fo this Tribunal an affidavit dated 12.10.2026 in support of the condonation delay.

3.3 The Ld. AR then contended that the registry has pointed out the delay of 22 days in filing the instant second appeal. The “Impugned order” is dated 02.09.2025 & the instant appeal ought to have been filed with in a period of 60 days as stipulated by law but same was filed on 22.12.2025. Hence delay of 22 days. An Affidavit in support dated 12.10.2026 was read out. It was contended that factum of passing of the “Impugned order” came to assessee’s knowledge on 06.12.2025 upon issuance of penalty notice only. Hence the delay & same should be condoned. Other averments made in the said affidavit too were read out. Per contra Ld. DR did not resist the delay nor opposed the contents of the affidavit & left it to bench to take an appropriate call basis law. After carefully perusing the affidavit and after hearing both the sides we are of the opinion that “sufficient cause” has been shown for delay of 22 days and according we condone the delay and admit the appeal.

3.4 The Ld AR then submitted that whereas the “Impugned Assessment Order” is a Biparte order the “Impugned Order” is an exparte one. Our attention was then invited to the appeal memo page 18 column No. 17 which has a caption “Address to which notices may be sent to the appellant” Wherein the e-mail address is [email protected] whereas all notice(s) for the hearing as statedin para 5 in fact went to different email addresses i.e. [email protected] and dmittal [email protected] & following table was read out which is reproduced by us as below:-

The Ld. AR also emphasized para 6 of the affidavit & invited our attention to PB page 35 towards acquittal order when the assessee was in judicial custody from 07.01.2023 to 08.03.2025 & finally was acquitted by court. Per contra Ld. DR has placed reliance on the orders of the lower authorities. Hearing was then over & closed.

4 Observations, Finding and Conclusions

4.1 We have to decide the legality, validity and the proprietary of the “Impugned Order” basis records of the case & the rival submissions canvassed before us.

4.2 We have carefully perused the records of the case and have heard the submissions.

4.3 We basis records of the case and after hearing and further upon examining the rival contentions of the Ld. AR and the Ld. DR canvassed before us, are of the considered opinion that “Impugned Order” is exparte nature as none of the notice(s) Supra u/s 250 of the act were served to the assessee as per form no. 35 which address was [email protected] & all notice(s) went to different email id’s as per 3.4 above. Under these facts & circumstances we hold that “Impugned Order” is exparte & was passed without hearing the assessee. Accordingly, we set aside the “Impugned Order” & remand the case back to CIT(A) on denovo basis.

4.4 In view of the above, we set aside the “Impugned Order” & remand the case back to file of the Ld. CIT(A) on denovo basis, who shall now pass a speaking & well-reasoned order.

5 Order

5.1 In the result the “Impugned Order” is set aside as and by way of remand back to the file of the Ld. CIT(A).

5.2 In the result the appeal of the Assessee is allowed for Statistical Purpose.

Pronounced in open court on 30.10.2026.