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Facts
The assessee's appeal was dismissed by the CIT(A) ex-parte because notices sent by email went into the assessee's spam folder and were not attended to. The assessee claims these notices were not received in time due to the email issue.
Held
The Tribunal noted that the notices from the CIT(A) went into the assessee's spam folder, providing a justified reason for non-response. Therefore, the CIT(A)'s ex-parte decision was set aside.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte due to non-receipt of notices, when the same were due to technical issues (spam folder).
Sections Cited
68
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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
This appeal by the assessee is directed against order dated 30.05.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds:
The Learned Commissioner of Income-Tax (Appeals) ["Ld. CIT (Appeals)"] has erred in law and facts on records in dismissing the Assessee's appeals on all three Grounds primarily due to non-submission of written arguments by the Appellant in response to his notices. It is submitted that those notices had gone to assessee's 'Spam' folder and hence could not be attended.
Standard Ganpati Merchandise Pvt. Ltd. Standard Ganpati Merchandise Pvt. Ltd. 2 ITA No. 2612/M/2023 On Merits 2. The Ld. CIT (Appeals) has erred in law and facts on records 2. The Ld. CIT (Appeals) has erred in law and facts on records 2. The Ld. CIT (Appeals) has erred in law and facts on records in dismissing the Assessee's appeal by upholding the in dismissing the Assessee's appeal by upholding the in dismissing the Assessee's appeal by upholding the disallowance of Rs.17,141/ disallowance of Rs.17,141/- out of rent, which is the aggregate out of rent, which is the aggregate of 2 months' rent i.e., April & May' of 2 months' rent i.e., April & May'13 and the component of 13 and the component of service tax thereon. service tax thereon.
3. The Ld. CIT (Appeals) has erred in law and facts on records 3. The Ld. CIT (Appeals) has erred in law and facts on records 3. The Ld. CIT (Appeals) has erred in law and facts on records in dismissing the Assessee's appeal by upholding the in dismissing the Assessee's appeal by upholding the in dismissing the Assessee's appeal by upholding the disallowance of Rs. 3,15,600/ disallowance of Rs. 3,15,600/- out of travelling expenses, out of travelling expenses, made on adhoc basis of 20% by wrongl made on adhoc basis of 20% by wrongly considering as y considering as personal expenses despite the fact that the appellant is a personal expenses despite the fact that the appellant is a personal expenses despite the fact that the appellant is a corporate entity and no element of 'personal nature' is involved corporate entity and no element of 'personal nature' is involved corporate entity and no element of 'personal nature' is involved nor there is any qualification in audited financial statements or nor there is any qualification in audited financial statements or nor there is any qualification in audited financial statements or tax audit report. tax audit report. 4.1 The Ld. CIT (Appeals) has 4.1 The Ld. CIT (Appeals) has erred in law and facts on erred in law and facts on records in dismissing the Assessee's appeal by upholding the records in dismissing the Assessee's appeal by upholding the records in dismissing the Assessee's appeal by upholding the ITO's action of addition u/s 68 of Rs. 25,60,500/ ITO's action of addition u/s 68 of Rs. 25,60,500/- being 75% of being 75% of cash withdrawal from Yes Bank on different dates, which was cash withdrawal from Yes Bank on different dates, which was cash withdrawal from Yes Bank on different dates, which was re-deposited into same bank on different date deposited into same bank on different dates based on s based on requirement or no requirement or no-requirement for business. The addition so requirement for business. The addition so made in purely on ITO's assumption as stated in assessment made in purely on ITO's assumption as stated in assessment made in purely on ITO's assumption as stated in assessment order, which has been upheld by the Ld. CIT (appeals). order, which has been upheld by the Ld. CIT (appeals). 4.2 The decision relied on by Ld. CIT (Appeals) in case of 4.2 The decision relied on by Ld. CIT (Appeals) in case of 4.2 The decision relied on by Ld. CIT (Appeals) in case of Dinesh Kumar Jain vs. PCIT 407 ITR 65 (Del.) is not applicable 65 (Del.) is not applicable to the facts of the Appellant's case because in that case, there to the facts of the Appellant's case because in that case, there to the facts of the Appellant's case because in that case, there were incongruities in the cash flow statement, while in the were incongruities in the cash flow statement, while in the were incongruities in the cash flow statement, while in the Appellant's case there is no incongruity at all in cash flow Appellant's case there is no incongruity at all in cash flow Appellant's case there is no incongruity at all in cash flow statement w.r.t. da statement w.r.t. dates of cash withdrawals and deposits.
At the outset, before us, the Ld. counsel for the assessee At the outset, before us, the Ld. counsel for the assessee At the outset, before us, the Ld. counsel for the assessee submitted that the notices issued by the Ld. CIT(A) through e-mail submitted that the notices issued by the Ld. CIT(A) submitted that the notices issued by the Ld. CIT(A) had gone to the assessee’s had gone to the assessee’s ‘spam folder’ of e-mail and hence, the mail and hence, the assessee could not appe assessee could not appear before the Ld. CIT(A). Accordingly, CIT(A). Accordingly, the Ld. CIT(A) decided the appeal Ld. CIT(A) decided the appeal ex-parte without taking into without taking into consideration submission of the assessee. consideration submission of the assessee. He prayed that matter e prayed that matter may be restored back to the file of the Ld. CIT(A) for deciding afresh. may be restored back to the file of the Ld. CIT(A) for deciding afresh. may be restored back to the file of the Ld. CIT(A) for deciding afresh.
We have heard rival submission of the parties and perused the rival submission of the parties and perused the rival submission of the parties and perused the relevant material on record. We have also perused the printout of relevant material on record. We have also perused the printout of relevant material on record. We have also perused the printout of Standard Ganpati Merchandise Pvt. Ltd. Standard Ganpati Merchandise Pvt. Ltd. 3 ITA No. 2612/M/2023 the ‘spam folder’ wherein the e wherein the e-mail from the e-mail address namely mail address namely dontreply@incometax.gov.in dontreply@incometax.gov.in received on 05.11.2013, , is appearing in ‘spam folder’.
3.1 In view of the above evidence In view of the above evidence, it is clear that it is clear that the assessee could not timely access could not timely access to the notices issued by the Income to the notices issued by the Income-tax Department. In our opinion, there is a justified reason for not Department. In our opinion, there is a justified reason Department. In our opinion, there is a justified reason responding to the notices issued by the Ld. CIT(A). Since, the Ld. ding to the notices issued by the Ld. CIT(A). Since, the Ld. ding to the notices issued by the Ld. CIT(A). Since, the Ld. CIT(A) has decided the issue in dispute raised in the grounds of CIT(A) has decided the issue in dispute raised in the grounds of CIT(A) has decided the issue in dispute raised in the grounds of appeal before him without taking into consideration submission of without taking into consideration submission of without taking into consideration submission of the assessee ,therefore, we feel appropriate to therefore, we feel appropriate to set-aside the fi aside the finding of ld CIT(A) and restore this appeal back to the Ld. CIT(A) for restore this appeal back to the Ld. CIT(A) for restore this appeal back to the Ld. CIT(A) for deciding afresh after taking into consideration submission of the deciding afresh after taking into consideration submission of the deciding afresh after taking into consideration submission of the assessee. The ground No. 1 of the appeal of the assessee is assessee. The ground No. 1 of the appeal of the assessee is assessee. The ground No. 1 of the appeal of the assessee is accordingly allowed.
4. The other grounds related to merit The other grounds related to merit of the additions are of the additions are therefore, accordingly allowed for statistical purposes. therefore, accordingly allowed for statistical purposes. therefore, accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.