ROYAL EDUCATIONAL SOCIETY AND RESEARCH CENTRE,KUNNAMKULAM vs. ASST. CIT, EXEMPTION CIRCLE, KOCHI

Brief facts of the case are that the assessee is a trust duly registered u/s. 12AA of the Income Tax Act, 1961 (the Act). The return of income for AY 2016-17 was furnished on 14.10.2016. Against the said return of income, the assessment was completed by Royal Educational Society and Research Centre the ACIT, Exemption Circle, Kochi (hereafter “the AO”) vide order dated 18.12.2018 passed u/s. 143(3) of the Act at a total income of Rs. 8,89,45,376/-. While doing so the AO treated the loans and borrowings of Rs. 9,58,83,298/- as unexplained income of the appellant society and added to the income for the alleged failure of the appellant to file confirmation letters and to prove creditworthiness, genuineness and identity of creditors.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte.

Being aggrieved, the appellant is in appeal before us in the present appeal.

We have heard the rival contentions of both the parties and perused the material available on record. The CIT(A) dismissed the appeal exparte by holding that the appellant could not put in appearance despite granting 4 opportunities. From para 4 of the CIT(A)’s order it would be clear that notices of hearing were issued through ITBA portal. 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 Royal Educational Society and Research Centre 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 denovo disposal of case.

Respectfully following the above judgement of the Hon'ble High Court we remand the matter back to the CIT(A) with the direction to dispose the appeal after affording opportunity of hearing to the assessee in accordance with law.

In the result, appeal filed by the assessee is partly allowed for statistical purposes.