ARCH TECH BUILDING MATERIALS PRIVATE LIMITED,CUDDALORE vs. ITO, WARD 1, CUDDALORE, CUDDALORE

Being Aggrieved by the above assessment order, appellant preferred appeal before the ld.CIT(A)[NFAC] contesting that Assessing Officer erred in making addition on account of cash deposits in the current account maintained with IDBI Bank as the same represents business receipts on sale of floor tiles etc. However, the ld.CIT(A) dismissed the appeal in limine for non- prosecution without entering into the merits of the appeal.

Being aggrieved, the appellant society is in appeal before this Tribunal in the present appeal.

We heard the rival submissions and perused the material on record. At the outset, we find that the ld.CIT(A) dismissed the 4 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 (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 : 5 “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, it is essential that before any action is taken, communication of the notice must be done in terms of the provisions as enumerated hereinabove. The provisions do not mention communication to be “presumed” by placing notice on the e- portal. A pragmatic view has to be adopted always in these circumstances. An individual or a company is not expected to keep the e-portal of the Department open all the time so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms etc. The principles of natural justice are inherent in the income-tax provisions and the same are required to be necessarily followed.

Having noticed as above, this court is of the firm view that the petitioner has not been given sufficient opportunity to put up its please with regard to the proceedings under section 12A(1)(ac)(iii) of the Act of 1961 and as it was not served with any notice. Therefore, he would be entitled to file his reply and the Department would of course be entitled to examine the same and pass a fresh order thereafter.

In view of the above, the writ petition is allowed and the order dated January 16, 2023 (annexure P-5) is quashed and set-aside. The Department would provide an opportunity of hearing to the petitioner and they will also allow the petitioner to appear personally 6 for the purpose and pass a speaking order independent of the order passed earlier by them on January 16,2023. The same shall be done expeditiously provided the petitioner file his reply within a period of three weeks.”

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(A) for denovo adjudication 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.

गाडᭅ फ़ाइल / Guard File.