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.
FULL TEXT OF THE ORDER OF ITAT COCHIN
This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 21.06.2024 for Assessment Year (AY) 2013-14.
2. Brief facts of the case are that the appellant is a partnership firm. The return of income was filed on 27.09.2013 for AY 2013-14 declaring total income of Rs. 4,84,650/-. Against the said return of income, the assessment was completed by the DCIT, Corporate Circle 1(1), Kochi (hereinafter called “the AO”) vide order dated 24.03.2016 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Ra. 9,79,700/-. While doing so, the AO had made additions under sections 40(a)(ia), 40A(3), etc. amounting to Rs. 4,95,049/-.
3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO for non-prosecution by the appellant.
4. Being aggrieved, the appellant is in appeal before me in the present appeal.
5. When the appeal was called nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, I proceeded to dispose of the appeal after hearing the learned Sr. DR.
6. From the order of the CIT(A) it would be clear that notices of hearing were issued through ITBA portal. In my considered opinion, it is not a valid method and manner of service of notice as specified under the provisions of section 282(1) of the Income-tax Act, 1961 Act and Rule 127(1) of the Income-tax Rules, 1962. Therefore, it is crystal clear that the notices were not served upon the appellant. To fortify our view, we would like to make reference to a decision rendered by the Hon’ble Punjab & Haryana High Court in the case of Munjal BCU Centre of Innovation and Entrepreneurship vs. CIT (Exemptions) (2024) 463 ITR 560 (P&H), wherein the Hon’ble High Court after making reference to provisions of 282(1) held that service of notice through ITBA portal is not valid service and remanded the matter to AO for denovo disposal of case.
7. Respectfully following the above judgement of the Hon’ble Punjab & Haryana High Court, I remand the matter back to the CIT(A) with the direction to dispose the appeal after affording reasonable opportunity of hearing to the assessee in accordance with law.
8. In the result, appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 21st January, 2025.
