Case Law Details
Syed Ariff Vs ITO (ITAT Bangalore)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) in Bangalore addressed the case of Syed Ariff, who appealed against the order of the National Faceless Assessment Centre (NFAC) dated January 11, 2024, concerning the assessment year 2017-18. The case highlights the importance of proper communication and the right to be heard in income tax proceedings.
Background of the Case
The assessee, Syed Ariff, is an individual who failed to file his income tax return for the assessment year in question. The Assessing Officer (AO) subsequently issued a notice to him, which went unanswered. Following this, the AO issued another notice, prompting Ariff to file objections claiming that the cash deposits in question were derived from agricultural income.
Despite his objections, the AO completed the assessment under Section 144 of the Income Tax Act, 1961, categorizing the cash deposits as unexplained investments and cash credits. This decision led Ariff to file an appeal with the NFAC, asserting that his previous submissions were not adequately considered.
Issues Raised in the Appeal
The primary contention in Ariff’s appeal revolved around the communication of notices. In Form 35, which he submitted as part of the appeal process, Ariff explicitly stated that he did not wish to receive notices or communications via email. However, the Commissioner of Income Tax (Appeals) (CIT(A)) proceeded to issue five notices to the email address provided in Form 35. This action led the CIT(A) to conclude that Ariff was disinterested in prosecuting his appeal, resulting in the dismissal of his case ex-parte.
Arguments Presented
During the hearing, Ariff’s Authorized Representative (A.R.) argued that the CIT(A) had violated his explicit request regarding communication methods, leading to a lack of knowledge about the hearings. The A.R. emphasized that the notices sent via email were not only improper but also unjust, as they precluded Ariff from adequately presenting his case before the CIT(A).
Conversely, the Departmental Representative (D.R.) supported the lower authorities’ decisions, urging the tribunal to dismiss the appeal and uphold the previous orders.
Tribunal’s Decision
After reviewing the arguments and the relevant materials, the ITAT acknowledged the procedural flaw in the CIT(A)’s handling of the case. The tribunal found that despite Ariff’s clear indication in Form 35 to avoid email communications, the CIT(A) had sent hearing notices to the provided email address. This oversight led to Ariff’s unawareness of the hearing dates, thereby impacting his ability to participate effectively in the proceedings.
In light of these findings, the ITAT decided to grant Ariff another opportunity to appear before the CIT(A). The tribunal set aside the orders made by the CIT(A) and remitted the case for a fresh hearing, ensuring that Ariff would be afforded a reasonable chance to present his case on its merits.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee challenging the order of NFAC dated 11.1.2024 for the assessment year 2017-18.
2. Brief facts of the case are that the assessee is an individual and he has not filed his return of income and based on the information available with the AO, the AO issued a notice for which the assessee had not replied and not filed the return of income. Thereafter, another notice was issued to which he filed his objections and explained that the cash deposits are nothing but the agricultural incomes. Therefore, the AO had made the assessment u/s 144 of the Income Tax Act, 1961 (in short “The Act”) by treating the deposits as unexplained investment and cash credits. The assessee filed an appeal before the NFAC and contended that the AO had not considered the replies filed by the assessee and in form 35, the assessee had specifically mentioned that notices/communication may not be sent to the e-mail. The ld. CIT(A) had issued 5 notices to the e-mail ID of the assessee and came to the conclusion that the assessee had no interest in prosecuting the appeal and decided the appeal ex-parte and dismissed the same against which the present appeal has been filed before this Tribunal with the following grounds of appeal:
3. At the time of hearing, the ld. A.R. submitted that the ld. CIT(A) has issued the notices to the e-mail address given in Form 35 even though the assessee had not opted for sending the notices through the e-mail ID and therefore, the assessee has no knowledge about the various notices sent by the ld. CIT(A) and prayed that one more opportunity be given to appear before the ld. CIT(A).
4. The ld. D.R. relied on the orders of the lower authorities and prayed to dismiss the appeal.
5. We have heard the rival submissions and perused the materials available on record. We have gone through Form 35 filed by the assessee. In the personal information column, the assessee had specifically stated that notices/communication may not be sent through e-mail. Inspite of the specific averment in Form 35, the ld. CIT(A) had communicated of the hearing notices through e-mail ID and therefore, the contention of the ld. A.R. that the assessee has no knowledge about the various hearing dates seems to be correct. Hence, in the interest of justice, we feel that one more opportunity is to be granted to the assessee to appear before the ld. CIT(A). In view of the above said facts and circumstances, we are inclined to set aside the orders of the ld. CIT(A) and remit the issue to the file of ld. CIT(A) to decide the appeal on merits after granting a reasonable opportunity of hearing to the assessee.
6. In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 28th Aug, 2024
Author Bio
