G I TEXTILES,GUNTUR vs. INCOME TAX OFFICER, WARD-1(1), GUNTUR

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ITA 720/VIZ/2025Status: DisposedITAT Visakhapatnam13 May 2026AY 2015-168 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeal ex-parte as the assessee was not validly served with notice of hearing. The Tribunal set aside the CIT(A)'s order and restored the matter for re-adjudication.

What were the facts?

The Assessing Officer (AO) initiated reassessment proceedings under Section 147 against the assessee for not filing a return of income, making additions for capital gains, cash deposits, and interest income. The assessee's appeal before the CIT(A) was dismissed ex-parte due to non-appearance.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal ex-parte without valid service of notice to the assessee. Whether the procedure for service of notice under the Act and Rules was followed.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148,Section 142(1),Section 282(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Visakhapatnam Bench, Visakhapatnam

Before: Shri Ravish Sood & Shri Omkareshwar Chidara

आयकर अपीलीय अिधकरण, िवशाखापटणम पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Visakhapatnam Bench, Visakhapatnam Before Shri Ravish Sood, Judicial Member and Shri Omkareshwar Chidara, Accountant Member आ.अपी.सं /ITA No.720/Viz/2025 (िनधा�रण वष�/Assessment Year:2015-16) G I Textiles, Vs. Income Tax Officer, Guntur. Ward-1(1), PAN: AAGFG0979A Guntur. (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: Shri GVN Hari, Advocate (Hybrid mode) राज� व �ारा/Revenue by: Shri Shahnawaz Ul Rahman, CIT-DR सुनवाई की तारीख/Date of 07/05/2026 Hearing: घोषणा की तारीख/Date of 13/05/2026 Pronouncement: आदेश / ORDER PER. RAVISH SOOD, JM : The present appeal filed by the assessee firm is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 25/09/2025, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under section 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 (for short, “the Act”), dated 26/03/2022 for the Assessment Year (AY) 2015-

2 ITA No.720/Viz/2025 G I Textiles vs. ITO 16. The assessee firm has assailed the impugned order of the CIT(A) on the following grounds of appeal:

“1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in dismissing the appeal ex-parte. 3. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) ought to have deleted the addition of Rs.5,54,84,0000 made by the assessing officer under the head capital gains. 4. The learned Commissioner of Income Tax (Appeals) ought to have deleted the addition of Rs.60,00,000 made by the assessing officer towards deposits in the bank account. 5. The learned Commissioner of Income Tax (Appeals) ought to have deleted the addition of Rs.1,68,072 made by the assessing officer towards interest income. 6. Any other ground that may be urged at the time of appeal hearing.”

2.

Succinctly stated, the AO based on information that the assessee firm during the subject year had carried out financial transactions to the tune of Rs.6,16,52,072/-, viz., (i) payment received on transfer of immovable property: Rs.5,54,84,000/-; (ii) cash deposits of Rs.60,00,000/-; and (iii) interest income: Rs.1,68,072/- but had not filed its return of income for the year under consideration, initiated proceedings under section 147 of the Act. Notice under section 148 of the Act, dated 30/03/2021 was served upon the assessee firm. However, the assessee firm failed to file its return of income in compliance to the said notice. During the course of the assessment proceedings, the AO issued notices under section 142(1) of the Act calling upon the assessee

3 ITA No.720/Viz/2025 G I Textiles vs. ITO firm to put forth an explanation regarding the financial transactions. However, the assessee firm failed to revert back and furnish the requisite details. Accordingly, the AO vide the order passed under section 147 r.w.s 144 r.w.s 144B of the Act, dated 26/03/2022 determined the income of the assessee at Rs.6,16,52,072/- after making the aforesaid additions, viz., (i) payment received on transfer of immovable property: Rs.5,54,84,000/-; (ii) cash deposits of Rs.60,00,000/-; and (iii) interest income: Rs.1,68,072/-.

3.

Aggrieved, the assessee firm carried the matter in appeal before the CIT(A). As the assessee firm, despite having been put to notice about the fixation of the appeal, failed to participate in either of the four occasions, i.e., 16/08/2024, 06/12/2024, 28/05/2025 and 23/06/2025, the CIT(A) proceeded to dispose of the appeal on merits. Thereafter, the CIT(A) finding no infirmity in the view taken by the AO summarily approved the additions made by him and dismissed the appeal.

4.

The assessee firm, aggrieved with the order of the CIT(A) has carried the matter in appeal before us. 5. We have heard the Learned Authorized Representatives of both parties, perused the orders of the authorities below and the material available on record.

4 ITA No.720/Viz/2025 G I Textiles vs. ITO 6. Shri GVN Hari, Advocate, Learned Authorized Representative for the assessee (for short, “Ld. AR”), at the threshold of hearing of the appeal, submitted that the assessee had suffered the dismissal of the appeal without having been afforded an opportunity of participating and prosecuting its appeal before the said first appellate authority. Elaborating on his contention, the Ld. AR submitted that though the assessee firm in the Memorandum of Appeal, i.e., Form-35 had not opted for service of the notices/communications through email, but as discernible from the CIT(A) order, all the noticers intimating the fixation of the appeal, i.e., dated 06/08/2024, 28/11/2024, 20/05/2025 and 16/06/2025 were forwarded/dropped through email. The Ld.AR submitted that the assessee had in Form-35 at Column No.17 specifically provided the address at which he had opted the notices to be served/forwarded, viz., “10-2-10, IIND FLOORSAMBASIVAPET, Guntur, Kothapeta (Guntur) S.O, GUNTUR, Andhra Pradesh, India – 522001”. Also, the Ld. AR had taken us through Form-35 (first page) wherein he had though provided the email address but the column as to whether notices/communications may be sent though email was left blank. The Ld.AR submitted that as the assessee was not validly put to notice about the hearing of the appeal, therefore, he had remained

5 ITA No.720/Viz/2025 G I Textiles vs. ITO divested of sufficient opportunity to prosecute the matter before the CIT(A).

7.

Per contra, Shri Shahnawaz Ul Rahman, Learned CIT-DR submitted that as in the faceless regime of appellate proceedings before the CIT(A), the notices are forwarded/served at the email address and there is no mechanism for physical service of the notices intimating the fixation of the appeal, therefore, it is incomprehensible that on what basis the assessee had opted for physical service of the aforesaid notices. Apart from that, the Ld. CIT-DR had submitted that the assessee had provided its email address in Form-35, therefore, the forwarding/dropping of the notices intimating the fixation of the appeal on the said address was a valid service.

8.

We have given thoughtful consideration to the contentions advanced by the Learned Authorized Representatives of both parties.

9.

Admittedly, it is a matter of fact that the assessee firm in Form-35 in the relevant column at first page had provided its email address, i.e., “gitextiles@gmail.com” but had not opted for forwarding of the notices/communications on the said email address. We say so, for the reason that the assessee firm as against the column as to “whether notices/communication may be sent on email” had left the same blank. Apart from that, we find that the assessee firm had at Sl.No.17 of Form-

6 ITA No.720/Viz/2025 G I Textiles vs. ITO 35 specifically provided the address for forwarding the notices, viz., “10- 2-10, IIND FLOORSAMBASIVAPET, Guntur, Kothapeta (Guntur) S.O, GUNTUR, Andhra Pradesh, India – 522001”.

10.

Considering the aforesaid facts, we though find substance in the Ld. CIT-DR’s contention that in the faceless regime of the first appellate proceedings there is no mechanism for physical service of notices, but the said factual position cannot be gathered from the columns mentioned in Form-35. In our view, as the Form-35 at Column No.17 specifically provides for the address at which the assessee/appellant seeks the notices to be forwarded, therefore, the Ld. CIT-DR’s contention that the mechanism for physical service of notice is no more in existence and has been dispensed with cannot be accepted. In case, the claim of the Ld. CIT-DR is to be accepted, then the aforesaid column at Sl.No.17 as well as the option sought from the assessee/appellant as to whether notices/communications may be sent on email requires to be removed from the said “Form-35”.

11.

Be that as it may, we are of the view that as the assessee had in the present case provided his specific address for service of the notices/communications from the CIT(A)’s office and had not opted to be served through email, there is substance in the Ld. AR’s contention that the dropping of any of the notices intimating the fixation of the appeal in

7 ITA No.720/Viz/2025 G I Textiles vs. ITO the email address cannot be taken as a valid service of notice. Apart from that, we are of the view that section 282(1) of the Act r.w. Rule 127 of the Income Tax Rules, 1962 contemplates the complete procedure for service of a notice or summons or requisition or order or any other communication under the Act, which too has not been scrupulously followed while disposing of the appeal. In our view, as the assessee firm has not been validly put to notice about hearing of the appeal, therefore, the impugned order passed by the CIT(A), dated 25/09/2025 cannot be subscribed on our part and is liable to be set aside.

12.

We thus, in terms of our aforesaid observations set aside the order passed by the CIT(A) and restore the matter to his file with a direction to re-adjudicate the appeal after validly putting the assessee firm to notice as per the extant law/rules.

13.

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

Order pronounced in the open court on 13th May, 2026.

Sd/- Sd/- (OMKARESHWAR CHIDARA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated 13th May, 2026 OKK / SPS

8 ITA No.720/Viz/2025 G I Textiles vs. ITO

Copy to:

S.No Addresses 1 G.I. TEXTILES Complete address for sending notices D.No.10-2-10, 2nd Floor, 2nd Line, Sambasiva Pet, Guntur. 2 The Income Tax Officer, Ward-1(1), Guntur. O/o. Income Tax Office, CR Buildings, Kannavari Thota, Guntur. 3 The Pr. Commissioner of Income Tax, Visakhapatnam. 4 The DR, ITAT, Visakhapatnam Bench 5 Guard File

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