Assessee or a non-tax payer, cannot be expected to view the Portal now and then or keep the portal open all the time
In a recent judgment, the Hon’ble High Court of Punjab and Haryana and Madras High Court have quashed the impugned assessment orders observing that an assessee/non-tax payer cannot be expected to view the Income Tax Portal now and then.
ABCAUS Case Law Citation:
4465 (2025) (03) abcaus.in HC
5088 (2024) (03) abcaus.in HC
In the instant cases, a Writ Petition was filed by the Petitioners/assessees with prayer to quash the orders under Section 147 of the Act and rejection of application for approval u/s 12A
In the case before Madras High Court, the petitioner had no source of income other than salary earned from and the tax payable by her for each assessment year was deducted at source by the respective employer and after such deduction, no further income tax was payable by her, therefore, there was no necessity for the petitioner to pay to file return of income, hence, the petitioner was not aware as to when the notice u/s 148 of the Act regarding re-assessment proceedings was caused by the respondent Income Tax Department, however, the Department, without affording an opportunity of hearing to the petitioner, passed the impugned order, which was in violation of principles of natural justice.
The Department submitted that before passing the impugned orders, all the notices/communications were served/issued to the petitioner via. Online Portal, E-mail and RPAD, however, insofar as notices sent via. Email were concerned, the same bounced back and the notice sent through Notice sent through Registered Post with Acknowledge Due (RPAD) returned with an endorsement, ‘No such Addressee’, and therefore, it was not open to the petitioner to contend that no intimation was given before passing the impugned order, when the petitioner, having failed to utilize the same, cannot come out with a false plea and seek refuge under the pretext that the petitioner is not aware of such assessment proceedings.
In reply, the Petitioner submitted that she was not residing in India, but residing at U.S.A., therefore, there was no possibility for the petitioner to receive the notice that is alleged to have been sent to the petitioner via. RPAD.
The Hon’ble High Court observed that notices had been issued to the petitioner through all modes of service, viz., Online Portal, E-mail and RPAD. Insofar as notice sent through online portal is concerned, since the petitioner was not a regular income tax payer, she cannot be expected to view the Portal then and there. So far as the notice sent via. E-mail was concerned, since the same was stated to have bounced back, the same could not be known to the petitioner. Finally, the notice that was sent through RPAD was concerned, the same was returned with an endorsement, ”No such Addressee, as the petitioner was no longer resident of India, there was no possibility for her to respond to such notice.
The Hon’ble High Court opined that in above scenario, it was sheer clear that the petitioner was totally unaware of the proceedings being initiated by the respondent-Income Tax Department. The petitioner, being a non-tax payer, cannot be expected to view the Portal after a lapse of 8 eight years. Thus, the ignorance pleaded by the petitioner appears to be genuine.
The Hon’ble High Court set aside the impugned orders with direction to Petitioner to file a reply and AO to affording opportunity of personal hearing before passing the order.
In the second case before the Hon’ble Punjab & Haryana High Court, the assessee was a charitable institution which had made an application for section 12A registration. Show cause notice was issued to the petitioner for initiating proceedings under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961 by the Commissioner of Income Tax Exemptions but the said notice was not sent on the petitioner’s email or otherwise and was only reflected on the e-portal of the Department. Thereafter, two reminders dated in respect to the aforesaid show cause notice were also published that too on the e-portal of the Department. However, it was an admitted position that the said notice and reminders were not served upon the petitioner as there is no e-mail sent by them.
The Department defended its case and submitted that communication of the notice electronically would also include communication of notice by placing it on e-portal. It was also submitted that as the petitioner had submitted his form himself on the said e-portal, a presumption can be drawn that he was having knowledge of the notice/reminders which were placed on the e-portal as there was no requirement of submitting notice personally through e-mail or otherwise.
However, the Hon’ble High Court rejected the submission of the Revenue in the light of the provisions of Section 282(1) of the Act of 1961 and Rule 127(1) of the Income Tax Rules, 1962 provides for a method and manner of service of notice and orders.
The High Court observed that it is essential that before any action is taken, a communication of the notice must be in terms of the provisions as enumerated hereinabove.The provisions do not mention of communication to be “presumed” by placing notice on the e-portal. A pragmatic view has to be adopted always in these circumstances. An individual or a Company is not expected to keep the e-portal of the Department open all the time so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms etc.. The principles of natural justice are inherent in the income tax provisions and the same are required to be necessarily followed.
In view of the above, Writ Petition was allowed and the order was quashed and set aside.
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