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Facts
The assessee, an uneducated person unaware of English and digital communication, failed to respond to notices issued by the revenue. The Assessing Officer and CIT(A) passed ex parte orders due to non-compliance, citing notices issued via e-mail and the income tax portal.
Held
The Tribunal held that the ex parte assessment and penalty orders were not sustainable as the assessee was demonstrably unaware of the notices due to his lack of digital literacy. The orders were set aside, and the matters were restored to the Assessing Officer for fresh assessment.
Key Issues
Whether ex parte assessment and penalty can be sustained when the assessee proves genuine unawareness of notices due to illiteracy and lack of digital access?
Sections Cited
147, 144, 271(1)(c)
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Income Tax Appellate Tribunal, ‘D’ BENCH
Before: SHRI AMIT SHUKLA & SMT RENU JAUHRI
आदेश / O R D E R PER AMIT SHUKLA (J.M): These three appeals, being 5670 and 5671/Mum/2025, have been preferred by the assessee against (i) the order dated 15 July 2025 passed by the National Faceless Assessment Centre under section 147 read with section 144 of the Income Tax Act 1961, in relation to the quantum assessments, and (ii) the order dated 21 July 2025 imposing penalty under section 271(1)(c) of the Act arising therefrom. One of the appeals also challenges the order dated 10 March 2025. Since the issues in all three appeals emanate from the same factual matrix and interconnected proceedings, they were heard together and are being disposed of by this consolidated order.
The case of the assessee is that both the Assessing Officer and the Commissioner of Income Tax (Appeals) passed their respective orders ex parte, citing non-compliance of notices. The assessee has pleaded before us that he is an uneducated person who neither reads nor writes English and does not have access to or knowledge of e-mail or the income tax portal. It has been asserted that he was genuinely unaware of the issuance of notices, and therefore could not respond. The assessee emphasises that there was never any intention to disregard or avoid the proceedings, and there was no deliberate non-compliance of notices; the non-participation occurred solely because he was unaware of such notices.
We have perused the impugned orders. It is evident that the Assessing Officer and subsequently the first appellate authority proceeded solely on the basis of non-appearance and absence of submissions. However, there is no evidence on record to establish that the assessee had actual knowledge of the notices issued electronically. In the factual circumstances where the assessee is uneducated and unable to understand or access digital communication, the failure to participate cannot be construed as contumacious conduct or culpable disregard of statutory obligations. When the explanation is examined against these realities, we find it difficult to hold that the assessee was afforded a fair and effective opportunity of hearing before the assessments were concluded.
In view of these facts, we hold that the assessee cannot be visited with an ex parte assessment order and consequential penalty merely because notices were issued through the income tax portal or by e-mail, when the assessee was demonstrably unaware of such issuance. Therefore, in the interest of justice, the quantum assessment orders passed under section 147 read with section 144 are set aside and the matters are restored to the file of the Assessing Officer. The Assessing Officer shall issue fresh notices in a form and manner that the assessee reasonably understands, grant adequate opportunity of hearing, and thereafter reframe the assessments strictly in accordance with law.
and others Rakesh Kumar Panchamlal Kesarwani and Other 5. The penalty imposed under section 271(1)(c) is based on the very quantum additions that now stand remanded. Once the foundation for the penalty has been set aside, the superstructure of penalty cannot survive. Accordingly, the penalty levied under section 271(1)(c) is deleted. However, it is clarified that the Assessing Officer shall be at liberty to initiate penalty afresh, if so warranted in law, depending upon the outcome of the fresh assessment.
In the result, the quantum appeals are allowed for statistical purposes and the penalty appeal is allowed.
Order pronounced on 28th November, 2025.