Narayana Sales and Services Koonamthai Edapally Vs DCIT (ITAT Cochin)
The Income Tax Appellate Tribunal (ITAT) Cochin has remanded the case of Narayana Sales and Services Koonamthai Edapally for fresh adjudication after ruling that service of income tax notices through the ITBA portal was invalid. The case involved a partnership firm that filed its income tax return for Assessment Year (AY) 2013-14, declaring an income of ₹4,84,650. However, the Deputy Commissioner of Income Tax (DCIT), Corporate Circle 1(1), Kochi, completed the assessment under Section 143(3) of the Income Tax Act, 1961, determining a revised total income of ₹9,79,700. This adjustment included additions under Sections 40(a)(ia) and 40A(3) amounting to ₹4,95,049. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], but the appeal was dismissed for non-prosecution.
ITAT Cochin found that the CIT(A) had issued hearing notices solely through the ITBA portal, which does not constitute valid service under Section 282(1) of the Income Tax Act and Rule 127(1) of the Income Tax Rules. The tribunal referred to a 2024 Punjab & Haryana High Court ruling in Munjal BCU Centre of Innovation and Entrepreneurship vs. CIT (Exemptions), which held that notices served only through the ITBA portal are invalid. Citing this precedent, ITAT Cochin remanded the matter to CIT(A) for fresh disposal, directing that the assessee be given a fair opportunity to present its case. The appeal was partly allowed for statistical purposes, with the order pronounced on January 21, 2025.
