Notices Went to Spam Folder- Bangalore ITAT Gives Fresh Chance in Reassessment

Pavan Kumar Vs ITO (ITAT Bangalore)

Notices Went to Spam Folder- Bangalore ITAT Gives Fresh Chance in Reassessment

The Bangalore ITAT granted relief to an assessee whose reassessment proceedings resulted in additions towards long-term capital gains, salary income and credit card payments after the assessee failed to respond to notices allegedly routed to the spam folder of his email account. The Tribunal condoned the delay and restored the matter back to the AO for fresh adjudication in the interest of substantial justice.

The assessee had not filed a return of income for AY 2015-16. Based on information regarding sale of immovable property, the department initiated reassessment proceedings alleging escapement of capital gains income. The AO also treated salary income and payments towards credit card bills as escaped income and unexplained expenditure respectively. Notices u/s 148A(b), 148 and 133(6) were issued to the assessee, purchaser of property and employer. Since the assessee did not respond, the AO completed assessment by making additions towards long-term capital gains, salary income and unexplained expenditure u/s 69C.

Before the CIT(A), the assessee filed appeal with delay of 97 days explaining that all departmental notices and communications had gone into the spam folder and therefore the assessee remained unaware of the reassessment proceedings as well as the assessment order. However, the CIT(A) rejected the explanation and dismissed the appeal on limitation grounds.

The ITAT observed that the assessment had been completed ex-parte u/s 144 and that denying an opportunity to contest the additions on merits would put the assessee in a disadvantageous position. Considering the explanation regarding spam-folder communications and the need to render substantial justice, the Tribunal condoned the delay and set aside the orders of lower authorities.

The matter was remitted back to the AO for de novo consideration with liberty to the assessee to furnish documents and explanations regarding capital gains, salary income and alleged unexplained expenditure towards credit card payments

FULL TEXT OF THE ORDER OF ITAT BANGALORE

This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 18/09/2025 in respect of the A.Y. 2015-16.

2. The brief facts of the case are that the assessee is an individual and did not file his return of income. The AO based on the information that the assessee had sold an immovable property had alleged that the income under the head Capital Gains were escaped from assessment. Similarly, the salary income and the credit card bills payments were also treated as income escaped from assessment. Notice u/s. 148A(b) was issued. The assessee had not responded and therefore an order u/s. 148A(d) was made and notice u/s. 148 was also issued to the assessee. The AO had also sent a notice u/s. 133(6) of the Act to the purchaser of the property and also to the employer of the assessee. The purchaser had furnished the details and the employer had also submitted the form -16 of the assessee. The AO based on the documents furnished by the purchaser had proposed to assess under the long term capital gains. The AO had also added salary income as income from salary and also the payments made to the credit card bills as unexplained expenditure u/s. 69C of the Act. The assessee had not responded to the said notice also and therefore he has confirmed his proposals by adding the long term capital gain, salary income and unexplained expenditure for paying the credit card bills. The assessee filed an appeal before the Ld.CIT(A) with a delay of 97 days. In the said delay condonation application, the assessee had submitted that the notices sent through the email has gone to the spam folder and therefore the assessee had no knowledge about the initiation of proceedings u/s. 147 of the Act. The Ld.CIT(A) had not accepted the said reasons and dismissed the appeal on the ground of limitation.

3. As against the said order, the assessee is in appeal before this Tribunal.

4. At the time of hearing, the Ld.AR submitted that the assessee was not able to appear before the AO since the various notices had gone to the spam folder and therefore the assessee had no knowledge about the notices as well as the assessment order and therefore prayed to grant an opportunity to appear before the Ld.CIT(A). Insofar as the merits are concerned, the Ld.AR submitted that the estimation of income under the head long term capital gains, salary income and other expenditures incurred for paying the credit card bills are not warranted and therefore prayed to grant an opportunity to appear before the AO for producing the details. The Ld.AR submitted that if the delay has not been condoned and the appeal is not decided on merits, the assessee would be put into a disadvantageous position and therefore prayed to allow the appeal.

5. The Ld.DR submitted that the assessee had not appeared before the AO and also not approached the CIT(A) in time and therefore no leniency can be shown on the assessee.

6. We have heard the arguments of both sides and perused the materials available on record.

7. The reason adduced by the assessee is that all the hearing notices were sent to the spam folder of the assessee and therefore he has no knowledge about the assessment proceedings and therefore not appeared before the AO for assessment

8. Considering the said facts and also the assessment was made u/s. 144 of the Act, in order to render substantial justice, we are condoning the delay of 97 days in filing the appeal before the Ld.CIT(A). We therefore, set aside the order of the authorities below and remit this issue to the file of the AO for denovo consideration, in accordance with law. It is also open to the assessee to furnish the documents before the AO.

9. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 21st May, 2026.