CHANDRA SEKHAR PULABIAHGARI,TIRUPATI vs. ITO, WARD-1(1), TIRUPATI

Succinctly stated, the AO, based on information that the assessee had during the subject year, carried out certain specified financial transactions, but had not filed his return of income for AY 2017-18 under section 139(1) of the Income-tax Act, 1961 (for short, "the Act"), initiated proceedings under section 147 of the Act. Thereafter, the assessment was completed by the AO vide his order passed under section 147 r.w.s. 144 r.w.s. 144B of the Act, dated 24/03/2025, wherein the income of the assessee was determined at Rs. 19,35,100/- after making certain additions, viz. (i). addition of unexplained cash deposits under section 69A of the Act: Rs.11,87,200/-; and (ii). addition towards unexplained expenditure under section 69C of the Act: Rs.7,47,900/-. 3. Aggrieved, the assessee carried the matter in appeal before the CIT(A), who dismissed the appeal both on account of non-prosecution as well as on the merits.

The assessee, aggrieved with the CIT(A) order, has carried the matter in appeal before us.

We have heard the Ld. Authorised Representatives of both parties, perused the orders of the authorities below and the material available on record, as well as considered the judicial pronouncement pressed into service by the Ld. AR.

Shri. KA Sai Prasad, the Ld. Authorised Representative (for short, “AR”) for the assessee at the threshold of hearing of the appeal submitted that the CIT(A) had disposed of the appeal without affording the assessee an effective opportunity of being heard. Elaborating on his contention, it was submitted by the Ld. AR that while filing “Form No.35” the assessee had specifically opted to receive all notices and communications through e-mail and had furnished his e-mail address as “picknwear.tirupati@gmail.com”, but the notices/enablement of communication

Per Contra, the Ld. Sr. Departmental Representative (for short, “DR”), though relied upon the orders of the lower authorities, but fairly did not controvert the factual assertion of the learned AR that the hearing notices were issued to an e-mail address different from the one mentioned by the assessee in “Form No.35”.

We have heard the Ld. Authorised Representatives of both parties in the backdrop of the orders of the authorities below.

Admittedly, on a perusal of “Form No.35”, screenshots of the e-filing portal account of the assessee and the impugned appellate order, we find substance in the grievance of the assessee. As is discernible from the record, the assessee had opted to receive notices and communications through e-mail and had furnished the e-mail address "picknwear.tirupati@gmail.com" in “Form No.35”. However, the hearing notices referred to in the impugned appellate order on all four occasions, i.e., dated 11/09/2025, 19/09/2025, 11/11/2025 and 18/11/2025, were issued to another e-mail account, viz., "atn9948623955@gmail.com". The revenue has not brought on record any material which would dislodge the assessee’s claim and prove that the e-mail address to which the notices were issued was the e-mail address furnished by the assessee for the purpose of appellate proceedings or that the assessee had otherwise authorised the Department to communicate through the said e-mail account.

In our considered view, once the assessee had furnished a specific e-mail address in “Form No.35” for the purpose of receiving notices and communications, the appellate authority was required to ensure that the notices of hearing were served upon the said e- mail address. We are of the view that the failure to issue the notices to the e-mail address furnished by the assessee had the effect of depriving him of an effective opportunity of representing his case before the CIT(A). Consequently, the impugned order cannot be sustained as the same stands vitiated for violation of the principles of natural justice.

We, therefore, in the interest of justice, set aside the impugned order of the CIT(A) and restore the matter to his file with a direction to adjudicate the appeal afresh after issuing proper notice of hearing to the assessee on the e-mail address furnished by him in “Form No.35” or on such other address as may subsequently be validly furnished by the assessee. The assessee appellant is also directed to extend full cooperation and shall not seek unnecessary adjournments in the course of the set aside proceedings.

Before parting, we may observe that the assessee has also raised additional grounds of appeal challenging, inter alia, (i) the validity of the proceedings initiated under section 147/148 on the ground that the reply filed in response to notice issued under section 148A(b) was not considered by the AO while passing the order under section 148A(d) of the Act; (ii) the assumption of jurisdiction under section 147 on the premise that the notice under section 148 dated 13/03/2024 was founded on an incorrect factual assumption regarding cash deposits of Rs.50,04,800/- in the assessee's current account; (iii) the jurisdiction of the AO under section 149(1)(b) on the ground that the alleged escapement of income, after excluding the aforesaid amount of Rs.50,04,800/-, was below the monetary threshold prescribed therein; and (iv) the applicability of the provisions of section 115BBE. Since we have restored the matter to the file of the CIT(A) on the preliminary issue of denial of reasonable opportunity, we refrain from expressing any opinion on the merits of the aforesaid additional grounds, which the assessee shall be at liberty to raise before the CIT(A), who shall consider and adjudicate the same in accordance with extant law after affording adequate opportunity of hearing to both the parties.

In the result, the appeal of the assessee is allowed for statistical purposes in terms of our aforesaid observations.