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Facts
The assessee failed to file an income tax return for AY 2012-13. The AO initiated reassessment proceedings due to cash deposits and undeclared salary income. Notices were sent to an old email ID of a former CA, leading to the assessee's lack of knowledge about the proceedings. The AO passed an ex-parte assessment order. The CIT(A) dismissed the assessee's appeal on grounds of limitation.
Held
The Tribunal held that the assessee's non-participation was due to lack of knowledge of proceedings, as notices were sent to an incorrect email ID and there was no proper service of demand notice. The appeal was allowed, and the matter was restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the appeal was correctly dismissed on limitation when proper notice of demand was not served and notices were sent to an old/incorrect email ID, leading to the assessee's lack of knowledge.
Sections Cited
147, 148, 142(1), 144, 69, 115BBE, 192, 156, 249(2)
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Income Tax Appellate Tribunal, MUMBAI “J(SMC
Before: SHRI VIKRAM SINGH YADAV & SHRI RAJ KUMAR CHAUHAN
BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER Assessment Year : 2012-13 Mamta Pathak, ITO, Ward-1(2), 404, 4th Floor, 6th Floor, Shivam Apt., vs. Ashar IT Park Mohanji Sunderji Rd No.9, Wagale Estate, Raghunath Nagar, Thane, Thane, Maharashtra-400604. Maharashtra-400604. PAN : ALCPP3684Q (Appellant) (Respondent) For Assessee : Shri Tanmay Phadke For Revenue : Shri Pankaj Kumar, CIT-DR Date of Hearing : 15-10-2025 Date of Pronouncement : 28-10-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 07-03-2025, pertaining to Assessment Year (AY) 2012-13, wherein the assessee has taken the following grounds of appeal:
“1.On the facts and in the circumstances of the case and as per the law, the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) ["the learned Commissioner (Appeals)] erred in dismissing the appeal on the reason of limitation without appreciating that the period of limitation did not commence due to non-service of the assessment order and the demand notice. Thus, the said observation may be reversed and the case may be remanded back to the file of the learned Commissioner (Appeals) for deciding on merits. 2.Without prejudice to the above, on the facts and in the circumstances of the case and as per the law, the learned assessing officer erred in considering the salary income of the Appellant at Rs.13,21,814/- instead of Rs.6,60,907/-. Thus, the learned assessing officer may be directed to consider the salary income at Rs. 6,60,907/-. 3.Without prejudice to the above, on the facts and in the circumstances of the case and as per the law, the learned assessing officer erred in taxing Rs.1,55,000/- under section 69 read with section 115BBE of the Act. Thus, the said addition may be deleted. 4.The Appellant craves leave to add, alter, rescind, or amend any of the above grounds of appeal.”
2. Briefly the facts of the case are that as per Non-filer Monitoring System and Individual Transaction Statement data, the AO observed that the assessee has during the FY. 2011-12 deposited cash of Rs. 1,55,000/- in her bank account with HDFC Bank Ltd. and that the assessee has salary income of Rs. 13,21,814/- which was not offered to tax as the assessee has not filed her return of income for the AY. 2012-13, basis the same, the reasons were recorded and a notice u/s. 148 of the Act was issued. In response to the said notice, no return was filed. Further, notice dt. 23-10-2019 u/s. 142(1) of the Act was issued fixing the hearing on 28- 10-2019 which remained non-complied with. Finally, a show cause notice dt. 08-11-2019 was duly served upon the assessee by e-mail with a direction to show cause, as to why the amount of cash deposited into the bank account and salary income earned during the year, as per the information available should not be treated as total income of the assessee for the year under consideration. However, the assessee neither attended in response to the above show cause notice nor submitted any submission. Accordingly, the AO finalized the assessment u/s. 144 r.w.s. 147 of the Act by assessing the income at Rs. 14,76,814/-. On appeal by the assessee, the same has been confirmed by the ld CIT(A) and against the said order, the assessee is in appeal before us.
During the course of hearing, the Ld.AR submitted that for the FY. 2011-12 pertaining to the AY.2012-13, the assessee was employed with Aditya Birla Sunlife Insurance Company Limited. She had earned salary income of Rs. 6,60,907/- (and not Rs. 13,21,814/- as alleged) and the aforesaid company had deducted tax of Rs. 50,858/- at source u/s. 192 of the Income Tax Act, 1961 („the Act‟) and the same was reflected in Form- 26AS of the assessment year under consideration. Since the tax was already deducted at source and the assessee did not have any other income chargeable to tax, the assessee had the impression that she was not required to file a return of income for the AY.2012-13 and accordingly, the return of income was not filed.
It was submitted that for the subsequent assessment year i.e., AY.2013-14, the return of income was filed by the assessee through the assistance of a Chartered Accountant. In the said return of income, the Chartered Accountant gave his own email ID, namely, canitin79@rediffmail.com for the purpose of communication. It was mentioned by the ld AR that the assessee has not been in touch with the said professional, who filed the above income tax return, for the last 10 years.
It was submitted that during the course of assessment proceedings for the AY. 2012-13, the AO initiated the reassessment proceeding u/s. 147 of the Act and the notice dated 27-03-2019 was issued on the email ID of the said consultant i.e., canitin79 @rediffmail.com. Thereafter, the AO issued another two notices dated 23-10-2019 and 08-11-2019 on the same mail ID. Since, the aforesaid email ID was of the previous professional with whom there was no communication and did not belong to the assessee, the assessee was completely clueless about the initiation of the aforesaid proceedings and thus could not participate in the assessment proceedings. It was also submitted that the AO never issued any notices/communications physically and attempt to serve them on the postal address of the assessee.
It was submitted that due to the aforesaid circumstances, the AO passed the assessment order, ex-parte on 02-12-2019 by determining the total taxable income at Rs 14,76,814/-. It was submitted that the assessee was completely clueless about the said assessment order and did not have any knowledge of the same until she approached another chartered Accountant (Pankaj Parekh and Co, Chartered Accountants) around last week of January, 2023.
It was submitted that when the said Chartered Accountant logged into the Income Tax portal of the assessee, he came to know about the ex-parte assessment and penalty proceedings. From a perusal of the portal, it was also observed that the AO did not issue any notice of demand u/s. 156 of the Act pursuant to the assessment order. Further, the portal showed that the assessment order was not sent on any email ID, but appeared to be merely uploaded on the Income Tax portal. Consequently, on 08-02-2023, the assessee filed an appeal before the Ld.CIT(A) against the said assessment order.
It was submitted that since non-participation during the assessment proceeding happened due to the incorrect mention of the mail ID, the assessee requested the new chartered accountant to mention her email ID and accordingly, the Income Tax portal was updated. Further, in the Form- 35 the assessee‟s email ID, namely, mamtapathak2@gmail.com was mentioned for future communications. During the appellate proceedings also, the Ld.CIT(A) however issued the notices on the previous email ID of the erstwhile professional and once again, the assessee could not participate and make submissions before the Ld.CIT(A) due to complete lack of knowledge.
It was submitted that despite giving the explanation regarding non- filing the appeal immediately after the issuance of the assessment order, the Ld.CIT(A) dismissed the appeal on limitation on the observation that – „the appeal was delayed by 1134 days‟. The Ld.CIT(A) merely went by the date of the assessment order and did not consider the legal submission on the limitation. It was categorically stated in the statement of facts that in the absence of service of notice of demand u/s. 156 of the Act, the limitation does not commence as per the provisions of Section 249(2) of the Act. Further, the Ld.CIT(A) did not consider the aspect that the assessee could not file an appeal immediately against the assessment order due to sufficient cause i.e., lack of knowledge of the assessment proceeding and passing of the assessment order and issue of demand notice.
It was submitted that the assessee has also submitted an affidavit in this regard and which has been placed on record. It was submitted that non-participation before the AO as well as before the Ld.CIT(A) happened due to lack of knowledge about the issuance of the notices and submitted that had the said notices been within the assessee‟s knowledge, she would have certainly responded to the same. It was accordingly submitted that the non-participation before the authorities as well as the delay, if any in filing the appeal before the Ld.CIT(A) was due to the aforesaid reason and submitted that she was never casual or grossly negligent about the assessment proceeding and the first appellate proceedings. It was accordingly submitted that the assessee be allowed one more opportunity and the matter may be remanded back to the file of the AO.
Per contra, the Ld.DR is heard, who has relied on the order passed by the AO as well as that of the Ld. CIT(A).
We have heard the rival contentions and pursued the material available on record. It is the claim of the assessee that she could not participate in the proceedings before the AO as well as before the Ld.CIT(A), which has happened due to lack of knowledge about the issuance of the notices since the notices have been sent to the email ID of the erstwhile Chartered Accountant, who gave his own email ID at the time of filing of returns and with whom the assessee is no more in contact for the last 10 years. It is also the claim of the assessee that she has updated her email ID at the time of filing the appeal before the Ld.CIT(A) and even then, the notices were sent on the earlier email ID in respect of which the assessee had no knowledge. It is also the claim of the assessee that she has still not been served with the notice of demand u/s 156 and the said notice of demand is even not available on the IT portal and as per section 249(2)(b), the period of limitation for filing appeal has to be counted from the date of service of notice of demand and not from the date of the assessment order which the Ld.CIT(A) has failed to take into consideration while dismissing the appeal of the assessee. The assessee has submitted an affidavit in this regard and the contents thereof have not been rebutted by the Revenue. In view of the above, we deem it appropriate that in the interest of justice, the assessee should be granted one more opportunity to represent her case and consequently, we deem it fit and proper to set aside the impugned order and restore the matter to the file of the Ld.CIT(A) to decide the same afresh as per law including the matter relating to condonation of delay after providing reasonable opportunity to the assessee. The assessee is also directed to attend to the proceedings without fail and furnish necessary information/documentation as so called for and as so advised.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 28-10-2025 Sd/- Sd/- [RAJ KUMAR CHAUHAN] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 28-10-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order
Dy./Asst. Registrar I.T.A.T, Mumbai