Portal Upload Alone Cannot Replace Due Process – Tax Notice Must Be Served Properly

Landmark Tax Ruling Upholds Due Process Case Study: Munjal BCU Centre of Innovation and Entrepreneurship v. Commissioner of Income Tax (Exemptions) Court: Punjab & Haryana High Court | Case No: CWP-21028-2023 | Date: March 4, 2024 Bench: Justice Sanjeev Prakash Sharma & Justice Sudeep Sharma

Background:

The petitioner, Munjal BCU Centre of Innovation and Entrepreneurship, a registered non-profit organization based in Ludhiana, was issued a show cause notice by the Income Tax Department under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961. However, the Department failed to serve the notice via email or post, uploading it only to the e-portal. The petitioner was unaware and did not respond, leading to an adverse order.

Legal Issue:

Is a notice uploaded only to the Departments e-portal considered legally served without email or physical communication? Arguments: Petitioner: Claimed no notice was received via official communication, thus denied a chance to be heard. Revenue: Asserted that using the portal implies regular checking, making the upload valid service.

Courts Reasoning:-

Section 282 and Rule 127 require service by email, post, courier, or in-person not portal uploads alone.- Taxpayers are not expected to monitor the portal daily.- Natural justice was violated as the petitioner was denied the right to be heard. Judgment:- The order dated 16.01.2023 was quashed.- A fresh notice must be issued through proper channels.- The petitioner should have a fair chance to respond, including a personal hearing. Significance:- Clarifies that portal uploads alone are not sufficient for notice service.- Upholds due process and taxpayer rights.- Ensures technology supports fair governance, not replaces it.

Conclusion:

Technological convenience must not override constitutional fairness. The ruling reinforces that the right to be heard is essential in tax administration.