KHALILULLA SALAMATULLA KHAN,MUMBAI vs. 41(1)(2) INCOME TAX OFFICER, MUMBAI

At the outset, it is noted that there is a delay of 172 days in filing the appeal as pointed out by the Registry. After hearing both the parties and perusing the material placed on record, we find that there was reasonable cause for the delay in filing the present appeal and hence, the delay is hereby condoned and appeal is admitted for adjudication.

During the course of hearing, the Ld.AR submitted that the Ld.CIT(A) erred in law and on facts in upholding the ex-parte penalty order u/s 271(1)(c), despite the assessment order dated 04-12-2019 passed u/s. 144 r.w.s. 147 of the Income Tax Act, 1961 (‘the Act’) having never been served upon the assessee, either physically or electronically, nor made available for download on the Income-tax portal. It was submitted that the assessee had no effective knowledge of the contents of the reassessment order, as the said order was not accessible on the portal against the PAN of the assessee. Upon noticing that a demand was being reflected on the Income- tax portal, the assessee, through his authorised representative, formally wrote to the AO pointing out the non-receipt and non-availability of the assessment order through email dated 25-10-2024 and requested that the same be provided or uploaded, so as to enable him to pursue statutory remedies. The representative also visited the Income Tax office number of times, however, the copy of the reassessment order could not be provided by the Income Tax Department. In absence of the foundational assessment order, the assessee was procedurally disabled from filing an appeal against the quantum assessment, despite being willing to do so. Based on the limited information available and to protect his rights, the assessee immediately filed an appeal against the penalty order, which alone had been served upon him. The assessee was further unaware that the Ld.CIT(A) had proceeded to pass an order, confirming the penalty and came to know of the same only upon receiving communication from his bank regarding freezing of his bank account pursuant to recovery proceedings. It was accordingly submitted that failure to serve the main assessment order, which forms the very basis of the penalty proceedings, constitutes a fundamental breach of principles of natural justice, vitiating not only the assessment itself, but also all consequential penalty proceedings, including the impugned order. It was further submitted that

Per contra, the Ld. DR is heard, who has relied on the order passed by the lower authorities and at the same time, did not raise any specific objection where the matter is set aside to the file of the Ld.CIT(A).

After hearing both the parties and considering the material available on record and the limited prayer raised on behalf of the assessee, we direct the Revenue to make available copy of the assessment order and demand notice to the assessee; and the impugned matter is set aside to the file of the Ld.CIT(A) to decide the same afresh, after providing reasonable opportunity to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 14-05-2026.