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Facts
The assessee, an individual, did not file a regular return of income for AY 2015-16. The Assessing Officer (AO) initiated reassessment proceedings based on cash deposits, leading to a best judgment assessment.
Held
The Tribunal held that notices were not served properly through the ITBA portal, violating principles of natural justice. Therefore, the matter was remitted back to the CIT(A) for de novo adjudication.
Key Issues
Whether service of notice through the ITBA portal is a valid method of service under the Income Tax Act and Rules, and whether the principles of natural justice were followed.
Sections Cited
139, 147, 148, 142(1), 144, 144B, 282(1)
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Income Tax Appellate Tribunal, Hyderabad ‘SMC’ Bench, Hyderabad
Before: SHRI INTURI RAMA RAO
(निर्धारण वर्ा/Assessment Year:2015-16) Shri Anandarao Kota, Income Tax Officer, Vs. Hyderabad. Ward 9(1), PAN: CVOPK0669Q Hyderabad. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: None. रधजस् व द्वधरध/Revenue by: Dr. Sachin Kumar, DR सुिवधई की तधरीख/Date of hearing: 06/10/2025 घोर्णध की तधरीख/Pronouncement: 09/10/2025 आदेश/ORDER This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 27.07.2024 for Assessment Year (AY) 2015-16.
Brief facts of the case are that the assessee is that the assessee is an individual, no regular Return of Income u/s.139 of the Income Tax Act, 1961 ("the Act") was filed for the A.Y. 2015-16. The Assessing Officer based on the information that the assessee made cash deposits of Rs.1,03,97,300/- in the savings bank account formed opinion that the income had escaped assessment and accordingly, Notice u/s.148 was issued by the Assessing Officer on 30.03.2021. The assessee neither complied with the notice u/s.148 and the notice issued u/s.142(1) of the Act nor responded. In the circumstances, the Assessing Officer passed best judgement assessment u/s.147 r.w.s. 144 r.w.s. 144B of the Act vide order dated 28.03.2022 at a total income of Rs.12,97,460/-. While doing so, the Assessing Officer made addition on account of business income of Rs.9,55,657/-, made addition of Rs.3,04,934/-, made addition of FD of Rs.25,000/- as unexplained investment and interest income earned of Rs.18,068/-.
Being aggrieved by the order of Assessing Officer, the assessee filed an appeal before the Ld. CIT(A), who partly allowed the appeal. While doing so, the Ld. CIT(A) directed the Assessing Officer to estimate the income on the sale of tickets of APSRTC and IRCTC while confirming the additions made on account of cash deposits in the bank account as unexplained income of the assessee.
Being aggrieved by the order of Ld. CIT(A), the assessee is in appeal before us. When the appeal was called, none appeared on behalf of the assessee despite issue of notice was served. Therefore after hearing the Ld. DR to dispose of the appeal on merits.
At the outset, I find that there is a delay of 140 days in filing of this appeal before the Tribunal. The assessee filed an Affidavit seeking condonation of delay on the ground that the C.A. who is looking after the tax matter had not brought to the notice of assessee, the order passed by the NFAC. Having regard to the averments made in the condonation petition, in the absence of any evidence to the contrary, I am of the considered opinion that it is a fit case to condone the delay of 140 days, therefore delay is condoned and admit the appeal for adjudication on merits.
On perusal of written submissions of the assessee and after hearing the Ld. DR, I find that the NFAC had issued notices of hearing through ITBA Portal. In my 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 notice was not served upon the appellant. To fortify our view, I would like to make reference to a decision rendered by the Hon’ble Punjab & Haryana High Court in the case of Munjal BCU Centre of Innovation and Entrepreneurship Vs. CIT (Exemptions) (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 de novo disposal of case. The relevant paragraphs of the judgment are reproduced below : “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 : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.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.
9.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. 10.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 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, I am of the considered opinion that proper notice of hearing was not served properly to the appellant. Therefore, I am of the considered opinion that in the interest of justice, the matter should be remitted back to the file of ld. CIT(A) for de novo adjudication after affording reasonable opportunity to the appellant, in accordance with law. The appellant is at liberty to file any evidence in support of her claim as he deems expedient.
In the result, the appeal of the assessee is allowed for statistical purposes.