BASHA MUSTHAFA,TRICHY vs. INCOME TAX OFFICER WARD 1(1) TRICHY, TRICHY

Briefly stated facts of the case are that appellant is an Individual running a fruit stall. The appellant filed return of income u/s.139(1) of the Act for the Assessment Year 2017-18 disclosing income at Rs.4,28,050/-. Based on the information that the appellant had made cash deposits of Rs.44,53,000/- in the bank account maintained with ICICI Bank, Thillai Nagar during the previous year relevant to assessment year under consideration, the Assessing Officer formed an opinion that income got escaped assessment from tax. Accordingly, a notice u/s.142(1) of the Act dated 15.08.2015 was issued. As there was no compliance, accordingly a noticed u/s.142(1) of the Act dated 09.05.2019, 02.07.2019 and 04.09.2019 were issued. The appellant had not complied with above notices. In the circumstances, e-Assessment Unit of the Department(hereinafter called ‘AO’) had proceeded with framing best judgment assessment vide order dated 20.12.2019 passed u/s.144 of the Income Tax Act, 1961 at a total income of Rs.48,81,050/-. While doing so, the Assessing Officer made addition of Rs.44,53,000/- being cash deposits in the bank as unexplained money of the appellant u/s.69A of the Act.

Being aggrieve by the above assessment order, an appeal was filed before the ld.CIT(A), who vide impugned order dismissed the appeal for non- prosecution without entering into the merits of the addition.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal. It is submitted that the appellant could not comply to the notices issued by the ld.CIT(A), no notice was served on the appellant.

On the other hand, the ld.Sr.Departmental Representative opposed the above submissions and submits that the order passed by ld.CIT(A) is justified as the appellant had not caused appearance before the ld.CIT(A).

We heard the rival submissions and perused the material on record. At the outset, we find that the ld.CIT(A) dismissed the appeal in limine for non- prosecution. We also find that ld.CIT(A) issued notices through ITBA Portal which is not a proper service of notice.

In our 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. The relevant paragraphs of the judgment are reproduced below : “7. We are afraid that we cannot subscribe to the submissions as advanced by the learned counsel for the Revenue-respondent. The provisions of section 282(1) of the Act of 1961 and rule 127(1) of the Income-tax Rules, 1962 provides for a method and manner of service of notice and orders which read as follows : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

In view of the above legal position, we are of the considered opinion that proper notice(s) of hearing were not served upon the appellant. Therefore, we are of the considered opinion that in the interest of justice, the matter should be remitted back to the file of ld.CIT(Exemption) for denovo disposal of application after affording reasonable opportunity to the appellant, in accordance with law.

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open Court on 29th May, 2026.