VIRENDRA SINGH PARIHAR,BILASPUR vs. INCOME TAX OFFICER WARD-2(1), BILASPUR, BILASPUR

Succinctly stated, the A.O based on information that the assessee had during the subject year made cash deposits exceeding Rs.10 lacs in his bank account, initiated proceedings u/s.147 of the Act.

During the course of the assessment proceedings, the A.O in absence of any explanation forthcoming from the assessee as regards the source of cash deposits of Rs.39,83,578/- made in his bank account No.760801011000784 with Bank of Baroda, Branch : Bilaspur, held the entire amount as unexplained cash credit and determined the income of the assessee at the same amount.

Aggrieved the assessee carried the matter in appeal before the CIT(Appeals). As the assessee despite having been afforded five opportunities i.e. on 27.12.2020, 04.11.2021, 19.01.2022, 30.07.2024 and 02.09.2024, had failed to participate in the proceedings before the first appellate authority, therefore, the latter finding no infirmity in the view taken by the A.O, upheld the addition made by him and dismissed the appeal.

The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal.

I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record.

Shri Sunil Kumar Agrawal, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that the A.O had grossly erred in law and facts of the case in assuming jurisdiction and initiating proceedings u/s.147 of the Act de-hors any valid “reasons to believe”. The Ld. AR in order to buttress his aforesaid claim had drawn my attention to the copy of “reasons to believe” as were culled out by the A.O in the body of the assessment order vis-à-vis those that were subsequently made available to him, Page 3 of APB. The Ld. AR submitted that the contents of the said “reasons to believe” were found to be at variance. Elaborating on his contention, the Ld. AR submitted that the A.O in the “reasons to believe” (that was supplied to him) had stated that notice u/s. 148 of the Act was issued after obtaining the prior approval of the Pr. CIT, Bilaspur.

Alternatively, the Ld. AR stated at bar that though the assessee had specifically in the memorandum of appeal i.e. in “Form 35” opted out of service of notices/communications from the office of the CIT(Appeals) through email, but on neither of the five occasions any hard/physical copy of a notice intimating the fixation of hearing of the appeal was ever served upon him. The Ld. AR in order to fortify his aforesaid contention had taken me through the “Form 35” which substantiated his claim that the assessee had opted out of service of all notices/communications from the office of the CIT(Appeals) through email. Carrying his contention further, the Ld. AR submitted that as the assessee had suffered dismissal of his appeal vide an ex-parte order without having been put to notice of hearing of the appeal on any of the occasions, therefore, the matter in all fairness be restored to the file of the CIT(Appeals) with a direction to re-adjudicate the same.

Per contra, Smt. Anubhaa Tah Goel, Ld. Sr. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. It was submitted by her that as the assesse had been afforded five opportunities to participate in the proceedings before the first appellate authority, therefore, it is difficult to fathom that he had remained unaware for a period of four years about the ongoing proceedings before the CIT(Appeals). The Ld. DR submitted that after introduction of the faceless regime in disposal of the appeals the service of notices/communications by the office of the CIT(Appeals) in physical mode had been dispensed with.

Admittedly, it is a matter of fact borne from record that the assessee had in the memorandum of appeal i.e. in “Form 35” opted out of service of notices/communications from the office of the CIT(Appeals) through email. Ostensibly, the CIT(Appeals) on all the five occasions viz. on 27.12.2020, 04.11.2021, 19.01.2022, 30.07.2024 and 02.09.2024 had issued notices/communications to the assessee about the fixation of hearing of the appeal through ITBA. The Ld. AR states at bar that no physical/hard copy of the notice(s) intimating the fixation of hearing of the appeal as was opted by the assessee in the memorandum of appeal had ever been served upon him.

Considering the aforesaid facts, I am of a firm conviction that as the assessee had not been validly put to notice about the fixation of the hearing of the appeal i.e. in a manner as was specifically opted by him in the memorandum of appeal i.e. Form 35, therefore, the dismissal of the appeal without validly putting him to notice cannot be sustained. I, thus, in terms of my aforesaid observations, am of the view that the matter in all fairness requires to be restored to the file of the CIT(Appeals) with a direction to re-adjudicate the same afresh after dropping the notice intimating the fresh date of fixation of the hearing of the appeal through ITBA portal, to which, the Ld. AR has concurred. Needless to say, the CIT(Appeals) shall in the course of set-aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to substantiate his claim on the basis of fresh documentary evidence, if any.

Apropos, the Ld. DR's claim that service of notices/communications by the CIT(Appeals)/NFAC is only carried out by dropping the notice/communications/orders in the email address provided by the assessee, I am unable to persuade myself to subscribe to the same. If that would have so then there was no need to provide for an option to the appellants to receive the notices/communications through e-mail or by any other mode. As the memorandum of appeal in “Form 35” specifically provides an option as to whether or not notices/communications (which includes notices intimating fixation of appeal) are to be sent on email address, therefore, I am unable to comprehend as to on what basis it is claimed by the Ld. DR that the assessee who had opted out of service of all notices/communications through email was validly served with the notices intimating the fixation of the appeal by dropping the same in his email account. As regards the email account provided by the assessee in the memorandum of appeal, i.e. personal information/Column 17, the same is only for the purpose of seeking details as sought for in the said column. Be that as it may, now when the assessee had in the memorandum of appeal in “Form 35” specifically opted out of service of all notices/communications from the CIT(Appeals)'s office through email, therefore, I am afraid that the Ld. DR's contention that the assessee was validly put to notice vide the notices dropped in his e-mail account does not merit acceptance.

In the result, appeal of the assessee is allowed for statistical purposes in terms of the aforesaid observations.