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Facts
The assessee filed a NIL return, declaring agricultural income of Rs. 28.56 lakhs. The AO assessed a total income of Rs. 31.38 lakhs, treating the agricultural income as unexplained money due to the assessee's failure to respond to notices under section 142(1). The CIT(A) dismissed the assessee's appeal for non-prosecution, leading the assessee to file an appeal before the ITAT, which was delayed by 104 days due to medical reasons.
Held
The Tribunal condoned the delay in filing the appeal, accepting the medical grounds as sufficient reasonable cause. It held that notices served through the ITBA portal, which remained uncomplied with, did not constitute valid service under section 282(1) of the Income-tax Act, 1961, and Rule 127(1) of the Income-tax Rules, 1962, relying on the Punjab & Haryana High Court decision in Munjal BCU Centre of Innovation and Entrepreneurship. Therefore, the matter was remitted back to the CIT(A) for de novo adjudication, granting the appellant an opportunity to present her case.
Key Issues
Whether service of notice through the ITBA portal, which remained uncomplied with, constitutes valid service; Whether there was sufficient cause for the 104-day delay in filing the appeal.
Sections Cited
143(3), 144B, 142(1), 282(1), Rule 127(1) of the Income-tax Rules, 1962
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Year: 2020-21 Pavana Manuel Xavier .......... Appellant Pavana House, Kadavantha, Ernakulm 682020 [PAN: AACPX0280F] vs. ITO, Corporate Ward - 2(3), Kochi ......... Respondent Assessee by: Shri Padmanathan K.V., CA Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 21.08.2025 Date of Pronouncement: 25.08.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi (NFAC) dated 05.02.2025 for Assessment Year (AY) 2020-21.
Brief facts of the case are that the appellant is an individual. The return of income for AY 2020-21 was filed on 07;01.2021 declaring Nil income and showing an agricultural income of Rs. 28,56,000/-. Against the said return of income, the assessment was completed by the Assessment Unit, Income Tax Department (hereinafter called "the AO") vide order dated 23.09.2022 passed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 (the Act) at a Pavana Manuel Xavier total income of Rs. 31,38,000/-. While doing so, the AO assessed the gross receipts from agricultural activities as unexplained money of the appellant for the failure of the assessee to respond to several notices issued u/s. 142(1) of the Act calling upon the appellant to substantiate the claim for agricultural income.
Being aggrieved, an appeal was filed before the CIT(A), who vide impugned order dismissed the appeal in limine for non prosecution.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
At the outset, I find that there is a delay of 104 days in filing the present appeal. The appellant filed a petition along with an affidavit seeking condonation of delay in filing the appeal, wherein it is stated that the delay had occurred as the appellant was under medical treatment and was advised bed rest thereafter. In support of this, he filed a Certificate dated 15.04.2004 from Susrutha Ayur Care, Thevara, Kochi. Therefore, it is prayed that the delay in filing the appeal may be condoned and the appeal may be admitted for adjudication. Having regard to the averments made in the affidavit seeking condonation of delay, in the absence of any evidence contrary, I am of the considered opinion that the appellant is prevented by sufficient reasonable cause in filing the appeal within
At the outset, I find that the NFAC issued notices through ITBA portal, with remained uncomplied with. 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 notices were not served upon the appellant. To fortify my 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 : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In view of the above, it is essential that before any action is taken, communication of the notice must be done in terms of Pavana Manuel Xavier 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 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(s) of hearing were 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
In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.
Order pronounced in the open court on 25th August, 2025. 8.