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Facts
The assessee company filed its return of income and was selected for scrutiny. Notices were issued, but the assessee did not respond. The AO completed the assessment ex-parte, making additions and disallowing certain amounts. The AO also initiated penalty proceedings. The assessee appealed to CIT(A), who dismissed it for non-appearance. The present appeal challenges this order.
Held
The Tribunal condoned the delay in filing the appeal, finding valid reasons for the assessee's non-appearance. It was held that the assessee was not granted a reasonable opportunity by the CIT(A) due to notices being sent to an ex-employee's email ID. The Tribunal set aside the orders of CIT(A) and AO and remitted the issue back to the AO.
Key Issues
Whether the assessee was denied a reasonable opportunity of being heard before the lower authorities due to incorrect communication of notices, and whether the delay in filing the appeal should be condoned.
Sections Cited
143(2), 142(1), 69C, 40(A)(ia), 271(1)(c), 245
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.
ORDER
PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 02/07/2024 in respect of the A.Y. 2016-17.
The brief facts of the case are that the assessee is a private limited company and filed their return of income on 13/10/2016. Thereafter the case was selected for scrutiny and the notices were issued u/s. 143(2) and 142(1) but the assessee had not responded to the said notices and therefore the AO had completed the assessment after going through the information available on record and thereby the difference between the net purchases shown in the P&L account and the details available with the AO from CBEC,
Page 2 of was disallowed and addition u/s. 69C was made. The AO had also disallowed an amount u/s. 40(A)(ia) of the Act. The AO also proposed to impose penalty u/s. 271(1)(c) of the Act. Subsequently, the AO had initiated proceedings to impose penalty u/s. 271(1)(c) of the Act. In the meanwhile, the assessee had challenged the assessment order dated 05/12/2018 before the Ld. CIT(A) and therefore the penalty proceedings were kept in abeyance. Subsequently, the Ld. CIT(A) had dismissed the appeal and based on that, the penalty proceedings were continued and the AO had imposed the penalty for the concealment of the income at 100% of the tax payable. As against the said order, the assessee filed an appeal before the Ld. CIT(A) but the Ld.CIT(A) had dismissed the same for non-appearance of the assessee.
As against the said order, the present appeal has been filed before this Tribunal.
This appeal is filed with a delay of 290 days and the assessee also filed an application to condone the said delay. In the said application, the assessee submitted that all the e-hearing notices were not received by the assessee since the said notices were sent to the ex-employee. Further, in the said application, the Director of the assessee company had also stated that he was undergoing treatment for prostate cancer and therefore he was not able to concentrate on the filing of the appeal. The assessee also submitted a medical certificate in support of their submissions and prayed to condone the said delay.
We have considered the reasons stated in the condonation application as well as the medical certificate furnished by the assessee and we are satisfied that the assessee has valid reasons for filing the appeal with a delay of 290 days and therefore we are inclined to condone the said delay and proceeded to decide the appeal on merits.
At the time of hearing, the Ld.AR submitted that the assessment order is an ex-parte order and therefore the addition made u/s. 69C as well as the disallowance made u/s. 40(A)(ia) of the Act are unwarranted. The Ld.AR
Page 3 of further submitted that the notices issued by the AO were not received by them since the said notices were sent to the email ID of their ex-employee and therefore no submission has been made before the AO. The Ld.AR also submitted that for the A.Y. 2018-19, the assessee filed their return of income in which they changed their email ID and also submitted that in form 35, the assessee had furnished a new email ID of their Chartered Accountant. But unfortunately, the order of the Ld. CIT(A) was not communicated in the said email ID and therefore submitted that the non- appearance of the assessee is not voluntary and required an opportunity to appear before the Ld.CIT(A). The Ld. AR also filed a small note and also enclosed the copy of the notices sent to the ex-employee’s email ID and also furnished the ITR-6 in respect of the A.Y. 2017-18 in which the new email ID has been given by the assessee. The Ld. AR also relied on the said documents and prayed to grant an opportunity to appear before the Ld. CIT(A).
The Ld.DR submitted that the notices were duly sent to the email ID given by the assessee and therefore the non-appearance may not be condoned and the appeal may be dismissed.
We have heard the arguments of both sides and perused the materials available on record.
We have considered the assessment proceedings and considered the email communication sent by the AO to the assessee u/s. 143(2) and u/s. 245 of the Act in which the said notices were addressed to the email ID i.e. girihr2005@yahoo.com. We have also considered the ITR-6 filed in respect of the A.Y. 2018-19 in which the assessee had changed the email ID as sean@intrago.co.in and also we have perused the form 35 filed by the assessee in which the email ID of the Chartered Accountant has been given.
From the above facts, we found the notices were sent to the ex- employee and therefore the assessee had no knowledge about the said notices and therefore he was not able to explain the facts before the AO.
Page 4 of Further, the form 35 filed by the assessee would also exhibits the email ID of the Chartered Accountant but the Ld. CIT(A) had not communicated the notices as well as the order to the said email ID but it was sent to the ex- employee’s email ID and therefore it is clear that the assessee was not granted a reasonable opportunity before the Ld. CIT(A) before dismissing the appeal.
We have also considered the reasons stated by the assessee in the delay condonation application and we are satisfied that the assessee was prevented from appearing before the Ld. CIT(A) and also considering the said facts, we have already condoned the said delay, in filing the appeal.
The present appeal is against the levy of penalty u/s. 271(1)(c) of the Act for the alleged concealment of the income. Since the AO had made the assessment ex-parte, we are of the view that one more opportunity may be granted to the assessee to appear before the AO. The AO is also directed to communicate the hearing notices to the email ID mentioned in form 35 or form 36 and thereafter proceed to decide the appeal on merits, after hearing the assessee.
We, therefore set aside the order of the Ld. CIT(A) as well as the order of the AO and remit this issue to the file of the AO.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 30th December, 2025.