ITAT Directs Fresh Hearing as FAA’s 6 mail Notices Likely Went to Spam Folder

Davis Jenny Vs DCIT (ITAT Bangalore)

In the case of Davis Jenny vs. DCIT, the Income Tax Appellate Tribunal (ITAT) Bangalore has remitted the matter back to the First Appellate Authority (FAA) for a fresh adjudication due to procedural issues. The appeal concerns the assessment year 2017-18, where the assessee, Davis Jenny, filed a return showing an income of ₹49,17,790. During scrutiny, the Assessing Officer (AO) identified a ₹30,55,000 cash deposit in the assessee’s bank account, attributing part of it to amounts received from various individuals and cash in hand. Despite the assessee’s responses, the AO added ₹10 lakh to the taxable income and applied a high tax rate under Section 115BBE.

The FAA, handling the appeal, issued six notices which the assessee failed to comply with. This non-compliance led the FAA to dismiss the appeal ex parte. Davis Jenny challenged this decision, asserting that the notices may have been delivered to the spam folder, which hindered their ability to respond. The ITAT, recognizing the potential communication issues, directed a fresh review of the appeal. The tribunal emphasized the need for the assessee to update contact details and fully cooperate with the proceedings. This decision aims to ensure the case is adjudicated fairly, allowing the assessee an opportunity to present their evidence properly.

FULL TEXT OF THE ORDER OF ITAT BANGALORE

This appeal is filed by the assessee against the ex parte order dated 11.6.2024 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2017-18.

2. Briefly stated the facts of the case are that the assessee filed return of income on 11.10.2017 declaring total income of Rs.49,17,790 and the case was selected for scrutiny and statutory notices issued to the assessee. The AO noticed that the assessee has deposited cash of Rs.30,55,000 in his bank account at Canara Bank. During the course of scrutiny proceedings it was noticed that the cash deposits were made out of Rs.10 lakhs received from Mr. C. Kumar, Rs.14 lakhs received from Mr. Santosh Lewis and Rs.6,55,000 was cash in hand and it was also submitted before the DDIT(Inv.) Unit 1(2), Bengaluru in response to summons u/s. 131 of the Act dated 24.3.2017. The assessee was asked to give detail of Mr. C. Kumar against which the assessee filed reply and the AO also issued show cause notice and considering the reply of the assessee, the AO made addition of Rs.10 lakhs and applied the tax rate as per section 115BBE of the Act. Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA) on 24.12.2019.

3. The ld. First Appellate Authority (FAA) issued six notices on various dates, but none of the notices were complied by the assessee, therefore the ld. FAA after relying on various judgments dismissed the appeal of the assessee ex parte. Aggrieved, the assessee is in appeal before the ITAT.

4. The ld. AR reiterated the submissions made before the lower authority and submitted that during the course of assessment proceedings, the assessee complied notices issued by the AO. The notices issued by the ld. FAA was not served to the assessee, therefore the assessee was unable to give reply. There was no intention of the assessee to disregard the notices issued by the ld. FAA and she submitted that during the course of assessment proceedings the assessee participated in the assessment proceedings. She submitted that the notices might have been delivered on the spam folder, therefore the assessee was unable to reply the notices. The ld. AR also submitted a paperbook of pages 1 to 114. She requested that if a chance is given to the assessee, she undertook to respond to the notices and substantiate the case of the assessee with evidence before the lower authorities.

5. The ld. DR relied on the order of lower authorities and objected to sending back the matter to lower authorities.

6. Considering the rival submissions and prayer of the assessee and in the interest of justice, we remit the issue to the CIT(Appeals) for fresh consideration and decision as per law. The assessee is directed to update its email id, communication address and other details and file necessary documents that would be essential and required for substantiating his case and for proper adjudication by the revenue authorities. Needless to say that reasonable opportunity of being heard be given to the assessee. The assessee is directed to cooperate with the proceedings and in case of further default, the assessee shall not be entitled to any leniency.

7. In the result, the appeal by the assessee is allowed for statistical purposes.

Pronounced in the open court on this 22^nd day of August, 2024.