Uploading of notice on ITBA portal cannot be treated to be a valid service of notice unless assessee has opted for service of notice through e-mail.
In a recent judgment, High Court of Chhattisgarh has held that uploading of notice on ITBA portal (e-portal) cannot be treated to be a valid service of notice unless assessee has opted for service of notice through e-mail
ABCAUS Case Law Citation:
4538 (2025) (04) abcaus.in HC
The appellant/assessee was an individual and engaged in the business of trading of computer system and its accessories.
The return of income filed by the assessee was selected for scrutiny and the original assessment was completed under Section 143(3) of the Income Tax Act, 1961 (the Act) whereby the total income of the appellant/assessee was assessed by estimating net profit @ 8% of sales and thereby making addition.
Feeling aggrieved by the said order of the Assessing Officer, the appellant assessee preferred appeal before the Commissioner of Income Tax (Appeals) which stood dismissed with the observation that “since the appellant failed to make compliance of the notices issued to them and only sought adjournments one after another, therefore, it indicated that the appellant was not interested in pursuing the appeal and had nothing to say against the additions made by the Assessing Officer”.
Against which, the appellant/ assessee preferred appeal before the Income Tax Appellate Tribunal (Tribunal) in which, the matter was remanded to the Assessing Officer for fresh consideration on all the issues raised by the appellant after providing reasonable opportunity of being heard.
In pursuance of the order passed by the ITAT, the matter was taken up for fresh assessment by the Assessing Officer, therefore, notices under Section 142(1) of the Act alongwith questionnaire were issued to the assessee through the Income-Tax Business Application (ITBA) portal. Since no response had been submitted/given by the appellant/assessee to the said statutory notices issued under Section 142(1), the Assessing Officer also issued show cause notice under Section 144 of the Act but it was not availed off. Ultimately, the Assessing Officer proceeded to close the said assessment proceeding under Section 144 read with Section 254 & 114B of the Act and reiterated his earlier assessment order whereby total income of the appellant/assessee was assessed by estimating net profit @ 8% of sales and thereby making addition. The Assessing Officer, while passing fresh assessment order also observed that despite service of statutory notices, the appellant/assessee failed to comply or furnish any response to the said notices, for which, the matter was remanded by the ITAT.
For the second time, the assessee preferred appeal before the CIT(A), which also stood dismissed on the ground of non- prosecution. Against which, the assessee flied appeal before the ITAT which was also dismissed affirming the orders passed by the CIT(A) and by the Assessing Officer.
The assessee took the matter to the Hon’ble High Court.
Before the Hon’ble High Court, the assessee challenged the impugned orders on the grounds that since in the appeal before the CIT(A) the appellant did not opt for service of notice through e-mail, therefore, notices under Section 142(1) of the Act could not be said to be validly served on the appellant, as the same ought to have been served on the appellant physically by registered or speed post.
It was argued that mere uploading of notices on the ITBA portal, would not exonerate the respondent-revenue authorities to serve physical notice on the appellant. As such, the appellant/ assessee was deprived of its reasonable opportunity of being heard, due to which, great prejudice has been caused to them, as their appeal has been dismissed on the ground of non- prosecution.
The assessee relied upon the decision of the High Court of Punjab and Haryana to buttress his submission on the point.
The Hon’ble High Court observed that it was quite vivid that in light of the statutory provisions of section 282 of the Act and Rule 127 of the Income Tax Rules, 1962 (the Rules), admittedly the appellant did not opt for service of notice through e-mail mode and, even in the e-mail address mentioned in Form 35, the appellant was not served with the notices in appeal, however, the same had been sent on appellant’s old email address and also uploaded on ITBA portal.
The Hon’ble High Court observed that in this regard, the the Hon’ble High Court of Punjab and Haryana clearly held that service of notice on ITBA portal (e-portal) is not a valid piece of service and observed that the provisions do not mention of communication to be “presumed” by placing notice on the e-portal. The principles of natural justice are inherent in the income tax provisions and the same are required to be necessarily followed.
The Hon’ble High Court opined that since the assessee did not opt for service of notice through e-mail and even it was not the case of the revenue that the appellant had been served with the notice on his e-mail address mentioned in Form 35 and further in light of the provisions contained under Section 282 of the Act and Rule 127 and also following the principles of law rendered by the High Court of Punjab and Haryana, uploading of notice on ITBA portal (e-portal) cannot be treated to be a valid service of notice.
Accordingly, the Hon’ble High Court set aside that the orders passed by the CIT(A) and the ITAT dismissing the appeals of the appellant on the ground of non-prosecution.
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