Case Law Details
Chequer Marketing Pvt Ltd Vs ACIT (ITAT Delhi)
Introduction : The case of Chequer Marketing Pvt Ltd Vs Assistant Commissioner of Income Tax (ACIT), as determined by the Income Tax Appellate Tribunal (ITAT) in Delhi, throws light on the key role the mode of service of notices plays in tax appeals. The central issue in this case was the validity of electronic notice service when the assessee expressed a preference for physical notices.
Analysis : Chequer Marketing Pvt Ltd challenged the appeal disposal by the CIT(A) on the grounds of inadequate service of notice and lack of sufficient opportunity for hearing. The company received several hearing notices through the ITBA Portal on its registered email address in 2021, but claimed not to have received them.
In Form No. 35, the company had specified that it did not want to receive notices or communications via email. The company’s Director, an 82-year-old man, was not acquainted with electronic communications.
The learned DR stated that issuing notices by email was mandatory. However, the ITAT took a contrary view. The tribunal found that if an assessee, in Form No. 35, opts for physical notices only, then an electronic notice cannot be considered due issuance and service of the notice.
Conclusion : The ITAT Delhi ruling in the case of Chequer Marketing Pvt Ltd Vs ACIT underscores the need for tax authorities to respect the preferred mode of communication selected by assessees, especially when it comes to crucial communication like notices. This verdict has significant implications for the administration of tax law, in particular, the modes of service of notices. It emphasizes the necessity of delivering notices in the manner preferred by the taxpayer to ensure fairness and justice. The verdict potentially offers a precedent for future cases where assessees have not received notices due to their preference for a different mode of communication.
FULL TEXT OF THE ORDER OF ITAT DELHI
Heard and perused the records.
2. At the time of hearing it transpired that on the last date of hearing on 29.05.2023, the Bench had made following observing:
“It appears from the impugned order that 09 opportunities have been afforded to the Assessee by issuing notices to the Assessee by the Ld. CIT(A) but the Assessee neither appeared nor filed any document/reply and therefore in the constrained circumstances, the Ld. CIT(A) passed the impugned order
The Assessee by filling affidavit claimed that the Assessee initially received a notice 2 7-01-2020, by which the case was fixed on 13-02-2020 on which date the Assessee sought adjournment for one month and thereafter the CIT(A) though issued several notices for hearing in 2021 but the same never sent or received by the Assessee
Considering the peculiar facts specifically the claim made by the Assessee in affidavit, the ld. DR is directed to verify the facts stated in Assessee ‘s affidavit, by perusing the Appeal Record before the Ld. CIT(A) and to file the status report alongwith copies of notices sent and received.
Case is adjourned to for compliance on 31/05/2023 and for taking cognizance on affidavit filed by the Assessee. Parties informed in open Court.”
3. Amongst other issues on merits, the assessee has raised ground about disposal of appeal by the learned CIT(A) without sufficient service of notice and opportunity of hearing.
4. Report is submitted by the learned DR on the basis of facts reported by the learned CIT(A), which mention that learned CIT(A) while hearing the appeal had issued notice through ITBA Portal on registered e-mail address of the assessee company, as mentioned by the assessee in form no. 35. The report submitted by the learned CIT(A) indicates that for A.Y. 2011-12 notice u/s 250 of the Act was issued on 27.01.2020 for date of hearing 13.02.2020 and for which adjournment was sought by the assessee/appellant. This corroborates the averments of assessee in the affidavit of Shri Giri Raj Goyal, aged about 82 years, who is Director of the assessee company, wherein it is submitted that except for this notice issued by postal means, no other notice received.
5. Learned AR pointed out that in form no. 35, although the e-mail address of the assessee company was mentioned but in the column meant to indicate, if notices/communication may be sent on email, the assessee company had preferred to specify ‘No’. Learned AR submitted that the reason for the same was that the Director is an old man and not acquainted with electronic communications. Thus, it appears that may be notices were issued by the learned CIT(A) on e-mail, but the same were not in the knowledge of assessee company as it had preferred to mention in form no. 35 that notices be issued in physical form only.
6. The learned DR has submitted that it is mandatory to issue notices by e-mail, but Bench is of view that where an option is sought from an assessee in form no. 35, as to mode of service of notice and if assessee prefers to opt for physical notice only, then electronic notice issued cannot be considered to be due issuance and service of the notice. Thus, the Bench is of the considered opinion that assessee company was not given reasonable opportunity of hearing and to contest on merits. Therefore, ground no. 2 is sustained. Issues on merit, for both assessment years, are restored to the files of Ld. CIT(A) for giving an opportunity of hearing to assessee company and decide afresh. Further, learned CIT(A) shall ensure that notices are issued on the postal address of the assessee as provided in form no. 35. Appeals are allowed for statistical purposes.
Order pronounced in open court on 31.05.2023.
