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Facts
The assessee made cash deposits of Rs.14.45 lacs during the demonetization period but failed to file an income tax return. The AO treated these deposits as unexplained money under Section 69A and passed an ex-parte order under Section 144. The CIT(A) subsequently dismissed the assessee's appeal ex-parte due to non-participation, citing that notices were successfully delivered to the assessee's registered email address.
Held
The Tribunal condoned the delay in filing the appeal, noting the assessee's uneducated status, physical ailment, and the claim that physical service of notice was preferred in Form 35. It found that the assessee was not properly put to notice for the CIT(A) proceedings and, therefore, restored the matter to the CIT(A) for re-adjudication of Grounds of Appeal Nos. 2 to 4. For future faceless proceedings, notices sent to the assessee's email will be considered proper service.
Key Issues
Ex-parte dismissal by CIT(A) due to alleged non-receipt of physical notices despite email delivery, condonation of delay in filing appeal, and the validity of email service in faceless assessment when physical service preference was indicated.
Sections Cited
144, 133(6), 69A
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Income Tax Appellate Tribunal, Visakhapatnam “SMC” Bench, Visakhapatnam
Before: Shri Ravish Sood, Hon’ble & Shri Balakrishnan S.
आदेश / ORDER प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 30.01.2024, which in turn arises from the order passed by the Assessing Officer (for short “A.O.”) u/s 144 of the Income Tax Act, 1971 (for short “the Act”) dated 26.12.2019.
The assessee has assailed the impugned order on the following grounds:
1. 1. In the facts and circumstances of case, learned CIT (Appeals) erred in ex parte dismissal of the appellant’s appeal before him.
2. Learned CIT(Appeals) erred in passing Orders ex parte on the ground the appellant has not responded to the email Notices sent, although the appellant indicated that he preferred Notices by physical service by mentioning the same in “ Personal Information” column in Form.35.
In the facts and circumstances of case, learned CIT (Appeals) ought to have observed that the learned AO also has not accorded a fair opportunity to the appellant, as only one Notice dt.10.12.2019 u/S.144 was given to the appellant and the Sec.144 Order was passed on 26.12.2019. 4. Learned CIT(Appeals) ought to have considered one of the Grounds taken before him that the appellant, being an uneducated fish farmer, was not aware of the e- proceedings and would have considered physical service of Appeal Hearing Notices before ex parte dismissal. 5. The appellant craves leave to add or amend any Ground of Appeal 3. Succinctly stated, the AO based on information that though the assessee during the demonetization period, i.e., 09.11.2016 to 31.12.2016, had made cash deposits of Rs.14.45 lacs in his bank account No.83727846 with Saptagiri Grameena Bank, Branch: Kalidindi account, but had not filed his return of income, thus called upon him to file the same by 31.03.2018. As the assessee had neither filed his return of income nor furnished any explanation regarding the source of cash deposits of Rs.14.45 lacs (supra), therefore, the AO called for the requisite details from the bank u/s 133(6) of the Act. Thereafter, the A.O. taking cognizance of the fact that no explanation regarding the cash deposit of Rs.14.45 lacs was forthcoming, held the entire amount as having been sourced out of the assessee’s unexplained money u/s 69A of the Act.
4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee despite having been afforded four opportunities, failed to participate in the proceedings before the first appellate authority, therefore, the latter dismissed the appeal on the said count itself. For the sake of clarity, the observations of the CIT(A) are culled out as under :
5. Aggrieved, the assessee has carried the matter in appeal before us. Shri K.Siva Ram Kumar, CA, Learned Authorized Representative for the assessee, at the threshold of the hearing, submitted that the assessee had remained divested of an opportunity to defend his case before the CIT(A). Elaborating further on his contention, the Ld.AR submitted that though the assessee in the Memorandum of Appeal, i.e. Form No.35 had opted out of receipt of notices/communication from the office of the CIT(A) through e-mail, but not hard/physical copy of any notice intimating the fixation of the appeal on either of the aforesaid 4 occasions was ever received by him. The Ld.AR to buttress his claim had taken us through the CIT(A) order, wherein, it was stated that all the notices were delivered to the e- mail address, i.e., busanaboina6@gmail.com. Carrying his contention further, the Ld.AR submitted that considering the fact that the appeal had been disposed of at the back of the assessee without validly putting him to notice, therefore, the matter in all fairness be restored to the file of the CIT(A) with a direction to readjudicate the same.
6. Per contra, the learned Departmental Representative (for short “Ld. DR”) relied upon the orders of the lower authorities. It was submitted by her that as the notices intimating the fixation of the appeal by the CIT(A) during the faceless regime were issued by dropping the same at the e-mail address of the assessee appellants, therefore, the contention raised by the Ld. A.R i.e., seeking of service of a physical/hard copy of the notices intimating the fixation of the appeal before the CIT(A) was devoid and bereft of any substance, and thus, liable to be rejected.
7. Before proceeding any further, we may herein observe that the present appeal involves a delay of 313 days (as pointed out by the Registry). The Ld.AR explaining the reason for the delay had drawn our attention to the application/petition filed by the assessee appellant along with a supporting “affidavit” dated 05.02.2025. The Ld. AR submitted that the assessee, an uneducated fish farmer, had during the relevant period suffered partial loss of his sight and thus, for the said reason had failed to pursue his income-tax matter and delayed the filing of the present appeal. The Ld.AR, to buttress his aforesaid claim had drawn our attention to the “medical certificates” along with photographs of the assessee.
Per contra, Ld. Department Representative (“D.R”, for short) had objected to the seeking of condonation of the delay involved in the present appeal. It was submitted by her that as the delay involved in filing the present appeal is inordinate, therefore, the same does not merit to be condoned.
We have thoughtfully considered the facts leading to the delay involved in the present appeal and find substance in the Ld. AR’s contention regarding the reasons leading to the delay in filing of the same. As the delay had occasioned for bonafide reasons and not on account of any lackadaisical conduct of the assessee, therefore, we have no hesitation in condoning the same. Our aforesaid view that a liberal approach should be adopted while considering the application filed by an appellant seeking condonation of delay is fortified by the recent judgment of Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur in Specia Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31st January, 2025.
On merits, we find substance in the Ld.AR’s claim that the assessee in the Memorandum of Appeal, i.e., in Form No.35, had specifically opted out of receipt of notices/communication from the office of the CIT(A) through e-mail. For the sake of clarity, the “Form 35” (extract) is culled out as under :
Admittedly, it is a matter of fact borne from the record that all the notices intimating the fixation of appeal were dropped in the e-mail account of the assessee i.e. busanaboina6 @gmail.com. Considering the aforesaid facts, we concur with the Ld.AR that the assessee for no fault on his part had remained divested of an opportunity to defend his case in the course of the proceedings before the CIT(A). Accordingly, in all fairness and interest of justice, we restore the matter to the file of the CIT(A) with a direction to re-adjudicate the appeal. The Grounds of Appeal Nos. 2 to 4 are allowed in terms of our aforesaid observations.
12. Before parting, we may herein observe, that considering the practical difficulty that is being faced by the department to effect physical service of the notices/intimations in the faceless regime of disposal of the appeals, the notice forwarded at the e-mail address of the assessee, by the CIT(A) office, intimating the fixation of the appeal during the set-aside proceedings will be taken as a proper service and will not thereafter be open to any challenge on the said count.
The Grounds of Appeal No.1 and 5 being general are dismissed as not pressed.
Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.
Order pronounced in the Open Court on 21st May, 2025.