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Facts
The assessee sold an ancestral property and had a 50% share. The Assessing Officer (AO) passed an ex-parte assessment order u/s. 147 r.w.s. 144 as the assessee did not respond to notices sent to an incorrect email ID. The assessee's appeal to the CIT(A) was also dismissed for non-appearance.
Held
The Tribunal held that the communications were sent to the wrong email ID, and therefore, the assessee was not provided a reasonable opportunity to be heard, violating the principles of natural justice. The assessment order and the appellate order were passed without hearing the assessee.
Key Issues
Whether the assessment and appellate orders passed without proper service of notices to the assessee violate principles of natural justice?
Sections Cited
148A(b), 148, 147, 144, 250, 143(2), 142(1), 144B, 151, 130, 151A(1), 234A, 234B, 234C
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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.
ORDER
PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC dated 09/10/2023 in respect of Assessment Year 2015-16.
The brief facts of the case are that the assessee is an individual and during the Assessment Year, the assessee along with his mother sold an ancestral property in which the assessee had a share of 50%. The assessee had not filed his ROI and therefore the AO passed an order u/s. 148A(b) of the Act along with the notice u/s. 148 of the Act.
Thereafter the assessee filed his return of income on 13/04/2022 in which the assessee had declared income from long term capital gains.
During the assessment proceedings, it is the case of the AO that various notices were sent to the assessee through the email ID acreddy.83@gmail.com and since the assessee had not responded to the said notices, the assessment order u/s. 147 r.w.s. 144 was passed on 16/03/2023. In the order, the AO treated the entire consideration received as income. As against the said order, the assessee filed an appeal before the Ld.CIT(A) and contended that the method of arriving the long term capital gains by the AO is not correct and also submitted that no notices were received by the assessee, before passing the order u/s.
The Ld.CIT(A) also dismissed the appeal on the ground that the assessee had not appeared for the notices issued on 01/05/2023, 04/09/2023 and 26/09/2023. As against the said order, the assessee is before this Tribunal with the following grounds of appeal:
1. The order of the Ld. CIT(A), NFAC, Delhi passed under section 250 of the Income Tax Act dated 09/10/2023 for Assessment Year 2015-16 in so far as it is against the Appellant is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the Appellant's case.
2. The appellant denies itself liable to be assessed at a sum of Rs. 56,03,818/- as assessed by the learned Assessing officer on the facts and circumstances of the case.
3. The order passed by the Ld. CIT(A) is in violation of the principles of natural justice in not providing the appellant adequate opportunity to file submissions.
4. The learned Commissioner of Income-tax (Appeals) is not justified in law in passing the impugned order, without granting another opportunity of hearing for filing the written submissions on each of the grounds of appeal and relevant documents in support of the case of the appellant on the facts and circumstances of the case.
5. The Ld. CIT(A) failed to adjudicate the issues on merits of the matter with respect to the additions and disallowances made in the assessment order passed under section 147 rws 144 rws 144B of the Act and the same is in violation of the principles of natural justice.
6. The Ld. CIT(A) is not justified in law in upholding and confirming the additions made by the Ld. AO in the assessment order without taking into consideration the indexed cost of acquisition, cost of improvement, expenses on transfer of the property on the facts and circumstances of the case.
7. The findings of the Ld. CIT(A) to the extent against the appellant in the order passed are not in accordance with the law and consequently the order is required to be quashed on the facts and circumstances of the case.
The appellant denies the liability to pay interest under section 234A, 234B and 234C of the Act, in view of the fact that there is no liability to pay additional tax as determined by the assessing officer. Without prejudice, the rate, period and on what quantum the interest has been levied are not in accordance with the law and are not discernible from the order and hence deserves to be cancelled on the facts and circumstance the case.”
In addition to the grounds of appeal
, the assessee also filed the following additional grounds : “1. The assessment order passed on the basis of an unsigned notice u/s 148A(b) of the Act is without jurisdiction.
2. The notice issued under section 143(2) of the Act, notices under section 142(1) of the Act and show cause notices issued under section 144 of the Act were not served on the appellant and consequently the assessment order passed is in violation of the principles of natural justice.
3. The order passed under Section 148A(d) of the Act without providing copy of the approval under Section 151 is without jurisdiction and in violation of the principles of natural justice.
4. The notice issued under section 148 of the Act is in the absence of any information as contemplated in Explanation 1 to section 148 of the Act and consequently the notice issued is bad in law.
The notice issued under section 148 of the Act is bad in law as the notice has several material defects and is issued without complying with the mandatory conditions for issue of the notice.
The notice issued under Section 148A(b) of the Act is time barred on the facts and circumstances of the case.
7. The order passed by the Ld. CIT(A) is in violation of the principles of natural justice in not providing the appellant adequate opportunity to file submissions. 8. Without prejudice, ground on the show cause notice issued is in contravention of the SOP for Faceless Assessment u/s 144B and consequently the assessment order passed is unsustainable in law. 9. The order passed u/s 148A(d) and notice issued u/s 148 of the Act by the Jurisdictional Assessing officer is in contravention to the provisions of section 151A(1) and section 130 of the Act and notification issued thereunder on the facts and circumstances of the case. 10. The information on the basis of which show cause notice u/s 148A(b) was issued not provided to the appellant along with the show cause notice and consequently the same is without jurisdiction and bad in law. 11. The appellant craves leave of this Hon'ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal
as may be necessary at the time of hearing.
12. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity.”
5. At the time of hearing, the Ld.AR submitted that the AO had sent the notices to the email ID i.e. acreddy.83@gmail.com whereas the correct email ID of the assessee is m_varun15@yahoo.in and contended that no notices were received by the assessee from the AO in order to file their objections. Even the Ld.CIT(A) also sent the hearing notices in the wrong email ID and therefore the assessee has no knowledge about the hearing dates and therefore he was not able to appear before the Ld.CIT(A).
6. The Ld.AR also raised various additional grounds in which the challenge was made to the notice issued u/s. 148A(b) of the Act. The Ld.AR also relied on other additional grounds raised and prayed to allow the appeal.
The Ld.AR also filed a paper book enclosing the notices and the screenshot of the contact details available in the portal of the department. The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
8. The appeal was filed with a delay of 66 days for which the assessee filed an application to condone the said delay. In the application, the assessee submitted that he was not able to download the order passed by the Ld.CIT(A) due to some technical glitches in the portal and therefore the assessee approached the jurisdictional assessing officer for furnishing the copy of the order of Ld.CIT(A) which was also not available with him. Thereafter, the assessee filed grievance petition on 05/12/2023 through the portal and since no response has been received, another grievance petition was filed on 22/02/2024. Thereafter, the order of the Ld.CIT(A) was uploaded on 01/03/2024 and therefore the delay has been occurred. The assessee in support of the above contentions had filed the documents in annexures – A, B & C. The assessee also explained that the delay after 01/03/2024 was because of the preoccupation of the advocates and therefore prayed to condone the delay.
We have considered the application filed by the assessee along with its annexures and found that the delay has been properly explained and we condone the delay of 66 days in filing the appeal before this Tribunal and took up the main appeal for hearing.
We have heard the arguments of both the sides and perused the materials available on record.
We have perused the screenshot of the contact details available in the portal of the Department and in the said screenshot, in page 2, the email ID of the assessee has been mentioned as m_varun15@yahoo.in.
Similarly, in ITR 2 filed by the assessee, the correct email ID was given by the assessee but in the screenshot of the email details dated 01/05/2023 through which the hearing notice dated 01/05/2023 was communicated, we find that the email ID mentioned in that is acreddy.83@gmail.com. Similarly, in the screenshot of the email dated 04/09/2023, the email ID of acreddy.83@gmail.com was mentioned. We have also perused the other screenshots of the email and found that all the hearing notices were sent to the email ID acreddy.83@gmail.com.
We have carefully considered the documents and found that all the communications were sent to the wrong email ID and therefore we accepted the contention of the Ld.AR and found that the order passed by the ld CIT(A) is definitely without providing a reasonable opportunity to the assessee. Further, we have also perused the AO order and the documents filed alongwith the paperbook. Admittedly all the notices were sent to the wrong email ID and therefore the assessee was not put on notice before passing the ex-parte order. Even though, the assessee had raised various grounds and additional grounds challenging the validity of the notices and order issued by the AO, we are not inclined to deal with the same since we are remitting the issue to the Ld.AO for fresh disposal. However we permit the assessee to raise all the issues and the additional grounds including the limitation, before the AO at the time of the assessment proceedings.
Since both the assessment order as well as the appellate order are passed without hearing the assessee, we deem it fit to remit the issue to the AO to pass denovo assessment after hearing the assessee and in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 15th October, 2024.