Case Law Details
Syed Nadeem Abbas Vs ITO (ITAT Delhi)
Introduction: The case of Syed Nadeem Abbas Vs ITO sheds light on the importance of adherence to principles of natural justice and the proper application of law during assessment and appeal proceedings. In this instance, the Income Tax Appellate Tribunal (ITAT) has directed re-adjudication due to the incorrect email addresses used for sending hearing notices.
Detailed Analysis: Syed Nadeem Abbas, the appellant in this case, filed an appeal against the order of the learned Commissioner of Income-tax (Appeals), Delhi. The original order dated 12.12.2018 was passed by the Income Tax Officer (ITO), Ward-28(4), Delhi for the assessment year 2016-17 under Section 144 of the Income Tax Act, 1961 (the “Act”).
The appellant raised a critical ground of appeal, which questioned the fairness and legality of the assessment. The second ground, in particular, highlighted that both the assessment order passed by the ITO and the order passed by the National Faceless Appeal Centre (NFAC) were deserving of being quashed. The basis for this challenge was the alleged non-compliance with the principles of natural justice, settled legal precedents from various courts, and a perceived lack of application of mind in the assessment process.
The facts of the case reveal that the appellant’s assessment was chosen for limited scrutiny under the Computer Assisted Scrutiny Selection (CASS) program. The specific issue under scrutiny was the claim of a significant agricultural income amounting to Rs. 50,20,892. However, the appellant failed to provide any documentary evidence in support of this claim. Consequently, the ITO treated the claimed agricultural income as income from other sources and finalized the assessment ex parte due to the non-compliance with show-cause notices.
The appellant then appealed to the Commissioner of Income-Tax (Appeals). During the appellate process, notices were issued for setting dates of hearings to the email address provided in Form 35. However, it came to light that there was a discrepancy in the email address noted by the Commissioner of Income-Tax (Appeals) in his order compared to the one mentioned in Form 35. The difference was a mere ‘g,’ where the appellant’s email ID was noted as ‘[email protected]’ instead of ‘[email protected].’ This small mistake in the email address had a significant impact – the appellant did not receive the notices for hearings. In the absence of his participation, the Commissioner of Income-Tax (Appeals) based his decision on the statement of facts filed in Form 35.
The Commissioner of Income-Tax (Appeals) concluded that the appellant seemed disinterested in pursuing the appeal. Consequently, the appeal was dismissed.
In light of these facts and the noted discrepancy, the appellant’s counsel argued that the assessment proceedings at the first appellate stage are conducted digitally. Notices for hearing dates are sent via email, and therefore, accuracy in the email addresses is crucial. The incorrect email address resulted in the appellant not receiving the notices and, consequently, not having the opportunity to make submissions and participate in the appeal process. The appellant requested that the matter be remitted to the Commissioner of Income-Tax (Appeals) for fresh adjudication, offering the appellant a reasonable opportunity to present his case.
The learned Senior DR did not oppose the request for re-adjudication.
Conclusion: The case of Syed Nadeem Abbas Vs ITO highlights the critical nature of adhering to the principles of natural justice in income tax proceedings. The correct communication of hearing notices is pivotal for allowing appellants to exercise their right to be heard and make submissions. The discrepancy in the email address, although a minor error, has significant consequences in ensuring a fair and just appeal process. The ITAT, recognizing the importance of due process, has ordered a re-adjudication of the case to allow the appellant a genuine opportunity to present their case. This decision underscores the commitment to ensuring that justice is not compromised due to minor procedural errors.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the assessee is against the order of learned Commissioner of Income-tax(Appeals), Delhi, Appeal No. CIT(A)-10/20233/2018-19 dated 19.12.2022 against the order under Section 144 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 12.12.2018 passed by ITO, Ward-28(4), Delhi for the assessment year 2016-17.
2. At the outset, we take up ground no.2 raised by the assessee in the present appeal before us which is reproduced as under:
Ground No.2:
That the assessment order passed under Section 144 by the learned Assessing Officer as well as the order passed by the National Faceless Appeal Centre(NFAC) deserves to be quashed since the same were passed without following the principles of natural justice, settled law as declared various courts and without application of mind.
3. In reference to the above ground, we note that the impugned assessment order has been passed by the learned Assessing Officer under Section 144. He noted that several opportunities were given by issuing show-cause-notices which remained not complied in absence of any corroborative evidence furnished in support of claim of the assessee. Assessment was completed ex pate. In the return filed by the assessee, he had claimed agricultural income of Rs.50,20,892. Case of the assessee was selected for limited scrutiny under CASS on the issue of “large agricultural income”. Since, no documentary evidences were furnished in this respect, this was added as income from other sources. Against this, assessee went in appeal before the learned Commissioner of Income-Tax(Appeals).
4. Learned Commissioner of Income-Tax(Appeals) noted four different dates which were fixed for hearing and remained unattended by the assessee. In para 3.1 of his order, learned Commissioner of Income-Tax(Appeals) noted that notices were sent on the e-mail id [email protected] mentioned in Form 35. Since, there was no compliance on the notices issued for the hearings and in absence of any submission from the assessee, learned Commissioner of Income-Tax(Appeals) disposed it on the basis of statement of facts filed in Form 35. Learned Commissioner of Income-Tax(Appeals) presumed that assessee is not interested in pursuing his appeal and thus did not find any reason to interfere with the order of learned Assessing Officer. The appeal was, thus, dismissed. Aggrieved, assessee is in appeal before the Tribunal.
5. On the above stated ground of appeal, learned counsel for the assessee submitted that in the present time, conduct of appellate proceedings at the first appellate stage is in digital mode. Notices for fixing the date of hearing are sent on email address mentioned in Form In the present case, learned Commissioner of Income-Tax(Appeals) took note of the email id incorrectly which resulted in to non-receipt of the notices issued for fixing the date for hearing. Learned counsel pointed to the discrepancy in the email id noted by the learned Commissioner of Income-Tax(Appeals) in para 3.1 of his order vis-a-vis that mentioned in Form 35. In Form 35, the correct email id is [email protected] whereas in the email id taken by learned Commissioner of Income-Tax(Appeals) for issuing notices is [email protected]. Considering this discrepancy, learned counsel prayed that the matter may be remitted back to the file of learned Commissioner of Income-Tax(Appeals) for fresh adjudication by giving reasonable opportunity of being heard and by allowing the assessee to make submission.
6. Learned Senior DR did not object on the prayer so made by the learned counsel.
7. Considering the facts on record and the discrepancy pointed out as noted above, we find it proper to accept the prayer made by the learned counsel and remit the matter back to the file of learned Commissioner of Income-Tax(Appeals) for fresh adjudication by affording reasonable opportunity of being heard to the assessee and allowing him to make his submission in support of the claim. The assessee is also directed to be diligent in attending the hearing so fixed. Accordingly, ground no.2 taken by the assessee is allowed for statistical purposes.
8. In the result, appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 11.09.2023.
