Case Law Details
Vikram Udeshanghbhai Padhiyar Vs ITO (ITAT Surat)
Introduction: In a recent case before the Income Tax Appellate Tribunal (ITAT) in Surat, the issue of non-compliance due to a discrepancy in the email address provided by the assessee was under consideration. The case highlighted the importance of accurate contact information for effective communication between tax authorities and taxpayers.
Detailed Analysis:
1. Background of the ITAT Case: The case revolves around an appeal filed by Mr. Vikram Udeshanghbhai Padhiyar, the assessee, against the order of the National Faceless Appeal Centre, Delhi (Ld. CIT(A)), dated 31st July 2023. The order confirmed an addition of Rs. 25.98 lakhs under section 69A for unexplained cash deposits in a bank. The original assessment order was passed by the Income Tax Officer, Ward-3(2)(4) on 10th December 2019.
2. Issue of Non-Compliance: During the appeal process, the assessee claimed that they did not receive any notice of the hearing scheduled by the Ld. CIT(A). The notice was sent to an email address different from the one provided by the assessee. The email address discrepancy arose as the assessee had used their Chartered Accountant’s email while filing the appeal ([email protected]), whereas the notice was sent to a different email address ([email protected]) used during the filing of the income tax return.
3. The Ld. CIT(A)’s Decision: Due to the non-compliance, the Ld. CIT(A) proceeded to dismiss the appeal. This decision was made without examining the merits of the case. The Ld. CIT(A) noted that the system-generated notice was sent to the email address based on the data provided by the assessee, and they could not claim that the email address did not belong to them.
4. Assessee’s Argument: The assessee argued that the use of different email addresses caused the non-compliance and, as a result, the appeal could not be properly represented. The Ld. CIT(A) had dismissed the appeal without addressing the substantive issues.
5. ITAT’s Decision: The ITAT considered the circumstances and found merit in the assessee’s submissions. They acknowledged that the non-compliance was a result of the email address discrepancy. The Ld. CIT(A) had not examined the merits of the case, and the dismissal was inconsistent with the provisions of Section 250(6) of the Income Tax Act.
6. Restoration of the Appeal: The ITAT decided to restore the appeal to the file of the assessing officer for reevaluation. The assessing officer was instructed to provide the assessee with a reasonable opportunity to present their case properly. The ITAT also reminded the assessee to be vigilant and ensure timely compliance with any notices issued by the Ld. CIT(A).
Conclusion: The ITAT’s decision in the case of Vikram Udeshanghbhai Padhiyar vs. ITO emphasizes the importance of accurate contact information during tax proceedings. A discrepancy in the email address led to non-compliance, which, in turn, resulted in the dismissal of the appeal without examining the merits. The ITAT granted the assessee another opportunity to present their case, underscoring the significance of effective communication between tax authorities and taxpayers.
FULL TEXT OF THE ORDER OF ITAT SURAT
1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld. CIT(A)”] dated 31.07.2023 for the assessment year 2017-18 in confirming the addition of Rs. 25.98 Lakhs made under section 69A on account of cash deposits in bank. The assessing officer passed assessment order passed by Income Tax officer, Ward-3(2)(4), / Assessing Officer under section 144 on 10.12.2019.
2. At the outset of hearing, Ld. Authorized Representative (Ld. AR) for the assessee submits that no notice of hearing fixed by the ld CIT(A) was received by the assessee. The ld AR for the assessee submits that while filing appeal in Form-35 the assessee provided the email address and Phone number of his Chartered Accountant (CA) as “[email protected] Ph 9925515546” , however, no notice of hearing of appeal was served on such email and Phone. Page -4 of the order of ld CIT(A) shows that notice of hearing of appeal was sent at email “ [email protected]” . such email may have been given at the time of filing return of income. In absence of notice the assessee could not make compliance. The ld AR for the assessee further submits that before the assessing officer the assesse made certain compliance in response to various notices issued to him. Complete details of the banking transaction could not be furnished as the e-assessment procedure was introduced for the first time and the professional were not very well equipped with the procedure. The ld AR for the assessee further submits that assessee is trader of cement and all the sale proceed of cement made in cash was deposits in his bank and almost entire payment was ultimately made to cement companies, which is duly reflected in the bank statement. The copy of bank statement was filed before the assessing officer. Though, the copy of bank statement was filed before assessing officer, but the fact could not be explained properly, which resulted in passing assessment order under section 144 of the Act. The Ld. AR for the assessee submits that assessee has good case on merit and is likely to succeeds, if one more opportunity and to decide the appeal on merit. The ld AR for the assessee prayed for restoring the appeal to the file of assessing officer instead of ld CIT(A) and to decide it afresh on merit, after giving opportunity of hearing to the assessee.
3. On the other hand, Ld. Senior Departmental Representative (Ld. Sr-DR) for the Revenue though supported the order of Ld. CIT(A). In alternative submission, Ld. Sr-DR for the Revenue submits that assessee should be more vigilant in making timely compliance and not to seek adjournment without valid reason. The system has issued notice to the assessee as per the data provided by the assessee and now the assessee cannot take the plea the such email, on which the notices were served does not belong to him.
4. I have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. I find that Assessing Officer while passing assessment order under section 144 made addition under section 69A on account of unexplained cash credit The Ld. CIT(A) dismissed the appeal for want of submission. Before me the ld. AR for the assessee vehemently argued that while filing appeal in Form-35 the assessee provided the email address and Phone number of his Chartered Accountant (CA) as “[email protected] Ph 9925515546” , however, no notice of hearing of appeal was served on such email and Phone. Page -4 of the order of ld CIT(A) shows that notice of hearing of appeal was sent at email “ [email protected]”. On perusal of record, including Form-35, I find merit in the submissions of ld AR for the assessee. Considering the fact that Ld. CIT(A) has dismissed the appeal in ex parte order without discussing the merit of the case. The impugned order passed by ld. CIT(A) is not in accordance with mandate of Section 250(6) of the Act. The assessment order was also passed under section 144 for the want of proper compliance. Therefore, I deem it appropriate to restore the appeal back to the file of assessing officer to pass the assessment order afresh. Needless to direct that before passing order afresh, the assessing officer shall provide reasonable opportunity to the assessee. The assessee is also directed to be more vigilant and to make timely compliance of the notice issued by Ld. CIT(A). With these directions, the grounds of appeal of assessee is allowed for statistical purposes.
5. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court at the time of hearing on Wednesday, 11th October, 2023.
