Shahnawaz Mustakkhan Pathan Vs ITO (ITAT Ahmedabad)
Email Notices Ignoring Assessee’s Option- Ex-Parte Dismissal Set Aside – Tribunal Orders Fresh Hearing
Assesee filed return of income for AY 2012-13 declaring ₹13,160. During assessment, AO noted that Assessee had undertaken transactions worth ₹75.97 crore on the Multi Commodity Exchange. As Assessee failed to properly explain or produce supporting records, AO estimated profit @0.5% of turnover & made addition of ₹37,98,608/- to total income.
On appeal, CIT(A) dismissed the case ex-parte, observing that Assessee did not comply with notices of hearing. However, in Form 35, Assessee had specifically opted that hearing notices should not be served through email. Despite this, all notices were issued only through email, which remained uncomplied with, resulting in dismissal of appeal without affording proper hearing.
Before Tribunal, it was argued that ex-parte dismissal was unjustified since the option given in Form 35 was ignored. Tribunal noted that Form 35 indeed contained a categorical mention that notices were not to be sent by email, but still CIT(A) proceeded to serve notices via email only. This amounted to violation of principles of natural justice, as Assessee was deprived of fair opportunity of being heard.
Considering these facts, Tribunal set aside the order of CIT(A) & restored the matter back for fresh adjudication on merits, with a direction to grant due opportunity of hearing to Assessee.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi dated 21.03.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2012-13.
2. At the outset itself, Ld. Counsel for the assessee stated that the order passed by the Ld. CIT(A) was an ex parte order and it was not the assessee who was to be faulted for the same. He contended that in the Form No.35 of appeal filed to the Ld. CIT(A) the assessee had categorically mentioned that the notices or communication of hearing should not be sent on email. He pointed out that despite so specifying, all notices were sent by the Ld. CIT(A) vide email and, therefore, remained uncomplied with. He drew our attention to the aforestated facts from Form No.35 which is part of the appeal set filed before me and from the order of the Ld. CIT(A) Page 3 where he pointed out that all notices of hearing were recorded by the Ld. CIT(A) to have been sent on email. He, therefore, contended that the assessee had remained unheard before the Ld. CIT(A), therefore, the appeal needs to be heard afresh by the first appellate authority.
3. Ld. DR fairly agreed with the same.
4. Having noted so, I find that in the present case, the assessment was framed making addition to the income of the assessee of Rs.37,98,608/- on account of alleged profits earned by the assessee on Multi Commodity Exchange transactions carried out during the year to the tune of Rs.75,97,21,755/-. The assessee had returned income of Rs.13,160/-, but during assessment proceedings, the assessee was unable to furnish proper explanation regarding the income earned from the commodity exchange transactions and, therefore, the AO estimated net profit @ 0.5% of the total transactions carried out by it, resulting in addition of Rs.37,98,608/- made to its income. Since, admittedly, the assessee had remained unheard before the Ld. CIT(A) on account of notices of hearing remaining unserved to the assessee, the issue needs to be restored back to the Ld. CIT(A) for consideration afresh after giving due opportunity of hearing to the assessee.
5. In the result, the appeal filed by the assessee is allowed for statistical purposes.
