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Facts
The CIT(A) dismissed the assessee's appeal ex-parte for non-prosecution, upholding an addition of Rs. 7,37,812 related to 30% disallowance of expenditure claimed and charging tax at the maximum marginal rate. The assessee contended that the notices from CIT(A) were sent to an incorrect email ID (missing one alphabet), leading to non-receipt and lack of participation in the proceedings.
Held
The ITAT found that the CIT(A) indeed sent notices to a wrong email ID, resulting in non-communication to the assessee and violating principles of natural justice. Therefore, the ex-parte order of the CIT(A) was set aside, and the matter was remanded to the Assessing Officer to provide the assessee a fresh opportunity to produce relevant records and evidences regarding the TDS issue and other additions.
Key Issues
Whether the ex-parte dismissal of an appeal by CIT(A) is valid when notices were sent to an incorrect email ID, and whether the matter should be remanded to the AO for fresh adjudication on merits.
Sections Cited
40A(ia)
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Income Tax Appellate Tribunal, Hyderabad ‘SMC-A’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the Assessee is directed against the order dated 24.04.2025 of learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2020-2021.
2 ITA.No.1071/Hyd./2025 2. The assessee has raised the following grounds :
1. “On the facts and in the circumstances of the case, the order of the Id. CIT(A) is erroneous and unsustainable in law apart from being passed in violation of principles of natural justice.
2. The Id. CIT(A) erred in dismissing the appeal without serving proper notices on the appellant.
3. Without prejudice to the above, the ld. CIT(A) erred in sustaining the addition made by the AO of.. Rs.7,37,812 by disallowing-30% of expenditure claimed on adhoc basis u/s.40(a)(ia) of the Act.
4. The Id. CIT(A) erred in upholding the action of the AO in charging the rate of tax at maximum marginal rate and thereby erred in sustaining the addition made. The authorities below failed to appreciate that the appellant society is registered under the A.P. Societies Registration Act, 2001. (Tax Effect: Rs.3,15,370)
5. Any other ground that may be urged at the time of hearing.”
3. At the outset, the learned Authorised Representative of the Assessee submitted that the learned CIT(A) has passed the impugned order ex-parte whereby the 3 ITA.No.1071/Hyd./2025 appeal of the assessee is dismissed for non-prosecution. He has pointed-out that the learned CIT(A) has issued notice on wrong email-ID as one alphabet of the email-ID provided by the assessee in Form-35 was missing while issuing the notice by the learned CIT(A). He has filed copies of the notice issued by the learned CIT(A) as downloaded from the ITBA-Portal and submitted that the assessee has given email-ID in Form-35 as ourgolflinks@gmail.com whereas the notice was sent by the learned CIT(A) to the email-ID ourgolfinks@gmail.com. Thus, he has pointed-out that the notices were issued to the email-ID which is not matching with the email-ID of the assessee due to the reason that one letter is missed-out in the email-ID, on which, the notices were issued by the learned CIT(A). Thus, the assessee could not receive the notices issued by the learned CIT(A) and consequently, there was no participation on behalf of the assessee in the proceedings before the learned CIT(A), resulting dismissal of the appeal ex-parte. The learned Authorised Representative of the Assessee has thus submitted that the impugned order of the learned CIT(A)
4 ITA.No.1071/Hyd./2025 may be set-aside and since the Assessing Officer has made the addition for want of relevant details and supporting evidences, therefore, the matter may be remanded to the record of the Assessing Officer for fresh adjudication after verification and examination of the relevant record to be filed by the assessee. He has pointed-out that the assessee wanted to file additional evidences before the learned CIT(A). However, due to non-receipt of the notices, the assessee could not file the additional evidences.
On the other hand, learned DR has submitted that despite sufficient opportunities given by the Assessing Officer, the assessee could not produce the supporting evidences on the point of deduction of TDS. He has relied upon the orders of the authorities below.
We have considered the rival submissions as well as relevant material on record. The learned CIT(A) has passed the impugned order ex-parte when there was no response to the alleged notices issued by the learned CIT(A). From the copy of the notices filed by the assessee as downloaded from the ITBA-Portal, it is evident that the 5 ITA.No.1071/Hyd./2025 learned CIT(A) has sent these notices to the email-ID which is incorrect due to the reason that one alphabet is missed- out in comparison to the email-ID given by the assessee in Form-35. Therefore, it is a clear case of non-communication of the notice to the assessee and, therefore, when the assessee has not received the notice issued by the learned CIT(A), the question of non-compliance does not arise. The learned CIT(A) has made the observations regarding the non-compliance in Para-4.1 as under : “4.1. In view of the above, it appears that the non- compliance to notices is deliberate as all the notices have been duly served upon the appellant on the registered email account. No response has been received from the appellant till date. It is reasonable to infer from the continued non-compliance that the appellant is not serious to pursue its appeal. Hon'ble Supreme Court in the case of CIT vs. B.N. Bhattacharjee and Another, 118 ITR 461 (SC) observed that preferring an appeal means more than formally filing it but effectively prosecuting it. Hon'ble M.P. High Court in the case of Estate of Late Tukojirao Hofkar vs. CWT, (1997) (223 ITR 480) (M.P.) dismissed the reference in default and for not taking necessary steps. Similar view has been taken by I.T.A.T. Delhi Bench in the case of CIT Vs.
6 ITA.No.1071/Hyd./2025 Multiplan India (P) Ltd. (1991)(38 ITD 320). Considering the above, it appears that the appellant is not interested in prosecuting its appeal. In view of continuous non- compliance by the appellant, the appeal is disposed ex- parte based on merits of the case.”
Therefore, the appeal of the assessee was dismissed due to non-compliance of the notice which were never served on the assessee. Accordingly, in the facts and circumstances of the case and in the interest of justice, the impugned order of the learned CIT(A) is set-aside and since the assessee wants to produce relevant record and details for verification and examination in support of the point of non-deduction of TDS, we grant one more opportunity to the assessee to produce the relevant record before the Assessing Officer. Accordingly, the matter is remanded to the record of the Assessing Officer for verification and examination of the relevant record to be filed by the assessee and then, pass an order in accordance with law, after providing due opportunity of being heard to the assessee.
7 ITA.No.1071/Hyd./2025 7. In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 19.11.2025.