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Facts
The assessee's appeals were preferred against ex parte orders of the CIT(A)/NFAC. The assessee claimed they did not receive hearing notices as they were sent to an incorrect email ID. The assessment orders passed by the AO were also ex parte, with the AO making additions for undisclosed income and unexplained investment for AYs 2016-17 and 2017-18.
Held
The Tribunal held that the notices were issued to an incorrect email ID, leading to a violation of natural justice. Consequently, the impugned orders of the CIT(A) were vitiated and set aside. The assessment orders passed by the AO were also ex parte and set aside.
Key Issues
Whether the ex parte orders passed by the Ld.CIT(A) and AO are valid when notices were not served on the correct email ID of the assessee, violating principles of natural justice?
Sections Cited
144, 148, 69A
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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI AMITABH SHUKLA
आदेश / O R D E R PER ABY T. VARKEY, JM: These are appeals preferred by the assessee company against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, by passing separate orders both dated 08.05.2025 for the Assessment Year (hereinafter referred to as "AY”) 2016-17 & 2017-18.
& 2104/Chny/2025 (AYs 2016-17 & 2017-18) Sri Vinayaga Builders & Homes Pvt. Ltd. :: 2 ::
At the outset, the Ld.AR of the assessee brought to our notice that the impugned action of the Ld.CIT(A)/NFAC for both the assessment years are ex parte orders qua assessee; and the reason for not responding before the Ld.CIT(A)/NFAC was because the assessee didn’t receive any notice of hearing. According to the Ld.AR, the notices were issued by the Ld.CIT(A) to some other e-mail ID and not to the e-mail ID provided by the assessee in its Form No.35. For buttressing this fact, the Ld.AR drew our attention to the notices issued in the name of the assessee but to the e-mail ID address “itclinets_rsa_2015@yahoo.co.in”
whereas in Form No.35 filed by the assessee, the e-mail ID shown is “magarajyothiservices@gamil.com”. Therefore, according to the assessee, it can’t be held responsible for not responding to the notices issued by the Ld.CIT(A) in wrong e-mail ID. Having said so, he also drew our attention to the assessment order passed by the AO which also is noted to be passed u/s.144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) [best judgment assessment] for AY 2016-17 as well as for AY 2017-18. According to the Ld.AR, a perusal of the assessment order would show that the AO has reopened the assessment by issuing notice u/s.148 of the Act for both the years on 30.03.2021 and has framed the assessment for both the years on 27.03.2022. According to the Ld.AR, due to spread of Covid-19 pandemic in the country, the & 2104/Chny/2025 (AYs 2016-17 & 2017-18) Sri Vinayaga Builders & Homes Pvt. Ltd. offices were not functioning and the assessee was in the dark about the ongoing assessment proceedings which led to the passing of the assessment orders ex parte qua assessee. Therefore, prayed for one more opportunity before the AO as held by the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC).
Per contra, the Ld.DR doesn’t want us to give one more innings to the assessee.
Having heard both the parties and after perusal of the records, we note that the impugned action of the Ld.CIT(A) for both the assessment years are ex parte orders qua assessee since the assessee failed to respond to his notices. In this regard, it was brought to our notice that the Ld.CIT(A) has issued notice to some other e-mail ID other than the e- mail ID provided by the assessee in Form No.35 i.e. magarajyothiservices@gamil.com. In such a scenario, assessee can’t be faulted for not responding to the notice issued by the Ld.CIT(A).
Therefore, there is a per-se violation of natural justice and as a sequitur, the impugned action of the Ld.CIT(A) is vitiated and hence needs to be set aside and we order so. Having said so, it is also noticed that the assessment order framed on 27.03.2022 in both the assessment years are also ex parte orders. For AY 2016-17, the AO is noted to have made addition of ₹3,67,41,000/- as the undisclosed income of the assessee & 2104/Chny/2025 (AYs 2016-17 & 2017-18) Sri Vinayaga Builders & Homes Pvt. Ltd. from sale of property and also added a sum of ₹69,18,923/- as difference in Revenue account being the difference between the total Revenue stated in the Audit Report filed on 15.03.2018 and the financial statement filed on 31.05.2021. Likewise, for AY 2017-18, the AO is noted to have added ₹4,80,00,000/- as unexplained investment taking note of the purchase value of immovable property and also added a sum of ₹16.20 lakhs u/s.69A of the Act as unexplained money, since no evidence was filed including the books of accounts of the assessee were for verification.
In this regard, it is noted that notice u/s.148 of the Act was issued on 30.03.2021 i.e. in the midst of Covid-19 pandemic and the assessment order has been passed on 27.03.2022. It has been brought to our notice that the assessee’s office was closed during Covid-19 pandemic period and the assessee was in the dark about the ongoing assessment proceedings, therefore, prayed for one more opportunity before the AO.
Be that as it may, since the assessee didn’t get proper opportunity before the assessing authority, who is the primary authority to assess the income of assessee, we are of the view that one more opportunity should be granted to the assessee. Therefore, we set aside the impugned action of the Ld.CIT(A) and restore the assessment back to the file of the AO for AYs 2016-17 & 2017-18 subject to assessee remitting cost of ₹20,000/- to the State Legal Aid Authority, Hon’ble Madras High Court within three & 2104/Chny/2025 (AYs 2016-17 & 2017-18) Sri Vinayaga Builders & Homes Pvt. Ltd. :: 5 ::
(3) months of receipt of this order; and produce necessary proof of depositing of the same before the AO and then, the AO to assess the income of the assessee afresh after hearing the assessee in accordance to law.
The Ld.AR has undertaken to appear and file all the written submissions to substantiate its claim before the AO. We expect him to do so and the AO to pass assessment order afresh in accordance to law after hearing the assessee.
In the result, appeals filed by the assessee are allowed for statistical purposes.
Order pronounced on the 24th day of October, 2025, in Chennai.