Case Law Details
Sandeep Kumar Vs ITO (ITAT Chandigarh)
Introduction: The Income Tax Appellate Tribunal (ITAT) in Chandigarh recently addressed an important aspect of income tax proceedings – the proper service of notices. The case of Sandeep Kumar vs. ITO for the assessment year 2011-12 raises questions about whether mere uploading of income tax notices on the e-portal constitutes proper service.
Grounds of Appeal: The appellant, Sandeep Kumar, filed an appeal against the order of the Ld. Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi, dated 27/02/2023. The grounds of appeal included objections related to the procedural aspects of the assessment.
Background of the Case: Sandeep Kumar did not file his Income Tax Return (ITR) for the assessment year 2011-12. The tax authorities noticed cash deposits of Rs. 12,00,000 in his savings bank account with Central Bank of India. Consequently, a notice under Section 148 was issued to the assessee on 27/03/2018. However, the appellant did not respond by filing an ITR. Subsequent notices under Section 142(1) were also issued but yielded no response from the assessee.
Lack of Response and Assesse’s Claim: During the proceedings, Sandeep Kumar claimed that he had not received any notices and was unaware of them. He asserted that the notices had only been uploaded on the tax portal. It was only upon receiving the impugned order that he became aware of the notices and the subsequent order confirming the additions made by the Assessing Officer (AO). The appellant requested an opportunity to be heard and to submit necessary documents and arguments.
The Revenue’s Response: The Revenue contended that the appellant had received multiple notices, but there was no response from him. The Ld. CIT(A), NFAC, Delhi, relied on the available records and passed the impugned order based on the appellant’s non-compliance.
ITAT’s Decision: After hearing both sides, the ITAT considered the unique circumstances of the case. Given the apparent lack of communication and the appellant’s inability to respond to notices, the ITAT deemed it appropriate to set aside the matter and directed the Ld. CIT(A), NFAC, Delhi, to reconsider the case after affording a reasonable opportunity to the assessee.
Conclusion: The ITAT’s decision emphasizes the importance of proper service of income tax notices. Mere uploading of notices on the e-portal may not suffice if the taxpayer is unaware of them. In this case, the matter has been sent back to the Ld. CIT(A) for reevaluation with the assurance of providing the appellant with a fair opportunity to present his case. This ruling underlines the significance of due process in income tax proceedings.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
1. This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC Delhi dt. 27/02/2023 passed under section 250 of the Income Tax Act, 1961 pertaining to A.Y. 2011-12 wherein the assessee has taken the following grounds of appeal:
1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A), NFAC in Appeal no. CIT (A), Hisar/10102/2019-20 has erred in passing order dtd. 27.02.2023 in contravention of provisions of S. 250 of the Income Tax Act, 1961.
2. That on the facts, circumstances and legal position of the case, Worthy CIT(A) has erred in upholding assessment order passed by Ld. AO u/s 144 even when the same was passed without service of notice u/s 142(1).
3. That on the facts, circumstances and legal position of the case, Worth} CIT(A) has erred in confirming the addition of Rs. 12,01,000 made by Ld. AO u/s 69A in regard to cash deposits in the bank account.
4. That on the facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the addition of Rs. 1,00,000/- made by Ld. AO on account of profit/income from trading of commodities on his own assumptions, surmises and without considering the facts of the case.
5. That on law, facts and circumstances of the case, the impugned orders passed by Worthy CIT(A) as well as by the Ld. AO deserves to be set aside since both these orders were passed and proceedings conducted in extreme haste and without affording reasonable opportunity of being heard.
6. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.
2. Briefly the facts of the case are that the assessee has not filed any ITR for the A.Y. 2011-12. On the basis of information available, it was noticed that during the year under consideration the assessee had made cash deposit of Rs. 12,00,000/- in his saving bank account maintained with Central Bank of India. In view of these facts, notice under section 148 was issued to the assessee on 27/03/2018 but assessee did not filed any ITR in response to this notice. Again Notice under section 142(1) was issued on 14/06/2018 and 16/10/2018 on the address available on the record calling for information. In response to the said notices, assessee neither attended the assessment proceedings nor furnished any information as required vide notice under section 142(1). Basis information available on record/gathered u/s 133(6), the AO passed an order u/s 144 r/w 147 assessing the total income of the assessee at Rs. 13,01,000/-.
3. Against the said order, the assessee moved an appeal before the Ld. CIT(A) who has since sustained the said additions. During the course of hearing, the ld AR submitted that the assessee never received any notices and the notices so issued and mentioned in the impugned order were only uploaded on the tax portal and the assessee had no knowledge of the same at the relevant point in time and it is only on receipt of the impugned order, he came to know that the notices have been issued and the order has been passed confirming the additions made by the AO. It was submitted by the ld AR that the assessee may be provided an opportunity of being heard and file necessary submissions and the matter may accordingly be set-aside to the file of the ld CIT(A) or the AO as the Bench may deem appropriate.
4. Per contra, the Ld. Sr. DR submitted that the assessee was issued several notices however there was neither any appearance nor any adjournment application was filed. Thereafter, a fresh notice was issued on 03/02/2023 and again there was no compliance on the part of the assessee therefore the Ld. CIT(A), NFAC, Delhi has passed the impugned order based on the material available on the record.
5. Heard the rival contentions and perused the material available on the record. Given the limited prayer for setting aside the impugned order in view of non prosecution on the part of the assessee and considering the facts and circumstances of the present case where the assessee was prevented from responding to the notices and attending to the appellate proceedings before the Ld. CIT(A), NFAC, Delhi for lack of communication, I deem it appropriate to set aside the matter back to the file of the Ld. CIT(A) to decide the same afresh after providing reasonable opportunity to the assessee.
6. In the result, appeal of the assessee is allowed for statistical purposes.
(Order pronounced in the open Court on 04/09/2023)
