NAGA HANUMAN SOLVENT OILS PVT LTD,VISAKHAPATNAM vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1), VISAKHAPATNAM

Succinctly stated the assessee company which is engaged in the business of manufacturing of solvent oils had filed its return of income for AY 2013-14 on 27/11/2014 declaring an income of Rs. 78,08,455/- along with agriculture income of Rs. 33,87,382/-. Subsequently, the case of the assessee company was selected for scrutiny assessment under Section 143(2) of the Act.

Originally, assessment was passed by the AO U/s. 143(3) of the Act, dated 29/12/2016.

Thereafter, the Learned Principal Commissioner of Income Tax-1, Visakhapatnam (in short “Pr. CIT”), vide his order passed

Thereafter, the AO, vide his order passed U/s. 143(3) r.w.s 263 of the Act, dated 29/10/2019 determined the income of the assessee at Rs. 1,14,24,460/-, wherein he disallowed the assessee’s claim of having derived agriculture income of Rs. 33.87 lacs and brought the said amount to tax in his hands.

Aggrieved, the assessee carried the matter in appeal before the CIT(A), but without success. For the sake of clarity, the observations of the CIT(A) are culled out as under:

The assessee, being aggrieved by the order of the CIT(A), has carried the matter in appeal before us.

Sri GVN Hari, Advocate, the learned Authorized Representative (for short “Ld.AR”) for the assessee company, at the threshold of the hearing of the appeal submitted that the assessee company had remained divested of an opportunity to put forth its case in the course of the proceedings before the CIT(A). Elaborating on his contention, the Ld. AR submitted that though the assessee company in its Memorandum of Appeal i.e., “Form-35”, had specifically opted out of receipt of notices/ communications from the office of the CIT(A) through e-mail, but no hard/physical copy of any such notices intimating the fixation of the hearing of the appeal on either of the said six occasions was ever served upon him. The Ld.AR to buttress his claim had taken us through the order of the CIT(A), which revealed that all the aforementioned six notices intimating the fixation of the appeal were issued through ITBA. The Ld. AR submitted that considering the aforesaid facts, the matter, in all fairness, be restored to the file of the CIT(A) with a direction to readjudicate

Per contra, Dr. Aparna Villuri, the Learned Departmental Representative (for short, “Ld. DR”) relied upon the orders of the lower Authorities.

We have thoughtfully considered the contentions of the Learned Authorized Representatives of both the parties in the backdrop of the facts discernible from the record.

Admittedly, it is a matter of fact borne from the record that the assessee company had in its Memorandum of Appeal i.e., “Form-35” specifically opted out of service of notices/ communications from the office of the CIT(A) through e-mail. For the sake of clarity, we cull out the relevant extract of “Form-35” as under:

We find that the CIT(A) office had forwarded the notices /communications intimating the fixation of the appeal on all the six occasions ie., notice(s) dated 16/02/2021; 20/12/2023; 10/01/2024; 01/05/2024; 05/10/2024 and 04/02/2025 electronically through ITBA, and no hard/physical copy of the said notices were ever served upon the assessee company. At this stage, we may herein observe that not only the assessee company had opted out of the receipt of the notices/communications through e-mail, but also at Sl No. 17 of the “Form-35” specifically provided the address at which it had sought the notices to be served upon.

Considering the facts involved in the present appeal, we find substance in the Ld. AR’s claim that as the assessee company had remained divested of an opportunity to participate in the proceedings before the CIT(A) and present its case, therefore, the order so passed by him at its back cannot be approved on our part. We, thus, in terms of our aforesaid observations, set-aside the matter back to the file of the CIT(A) with a direction to re-adjudicate the appeal on merits after