NITESH KUMAR GOYAL V. DEPUTY COMMISSIONER OF INCOME TAX

TAXC/14/2025

AI Insights

The case revolves around a tax appeal by Nitesh Kumar Goyal against the orders of the Income Tax Appellate Tribunal (ITAT) and the Commissioner of Income Tax (Appeals) [CIT(A)], which had dismissed his appeals on grounds of non-prosecution. The appellant contested that he was not properly served with notices as required under the Income Tax Act, 1961, specifically pointing out that notices were not served physically or through email as per his preference, but were merely uploaded on the ITBA portal. The court examined the validity of such service and the implications on the appellant's right to a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 746704 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 25-03-2025
• Assessment Year: misc
• Other Referred Cases: Munjal BCU Centre of Innovation and Entrepreneurship v. Commissioner of Income-Tax (Exemptions)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AJAY KUMRANI
• Assessee Lawyers: S RAO
• Keywords: Assessment; E-portal; Income Tax; Non-prosecution; Service of notice
• Section: 144; 143(3); 142(1); 246A; 254; 282; 127; 114B; 260-A

Judgement Text

"Page No.1 of 11 IN TAXC-14-2025 2025:CGHC:14678-DB AFR HIGH COURT OF CHHATTISGARH AT BILASPUR TAX Case No. 14 of 2025 Nitesh Kumar Goyal, 212, Lal Ganga Shopping Mall, G.E. Road, Raipur, Chhattisgarh. 492001 ... Appellant versus Deputy Commissioner of Income Tax Circle-1(1), Raipur, Aaykar Bhawan, Near Akashwani, Civil Lines, Raipur, Chhattisgarh. 492001 ... Respondent [Cause-title taken from Case Information System (CIS)] -------------------------------------------------------------------------------------------- For Appellant : Mr. S. Rajeswara Rao, Advocate For Respondent: Mr. Ajay Kumrani, Advocate on behalf of Mr. Mr. Amit Choudhari, Advocate ------------------------------------------------------------------------------------------- Division Bench Hon'ble Shri Justice Sanjay K. Agrawal and Hon'ble Shri Justice Sanjay Kumar Jaiswal Order on Board (25.03.2025) Sanjay K. Agrawal, J 1. This tax appeal, preferred under Section 260-A of the Income Tax Act, 1961 (for short the “Act of 1961”) was admitted for hearing on the following substantial question of law formulated by order of this Court dated 09.01.2025:- “Whether the Income Tax Appellate Tribunal is justified in affirming the order of the Commissioner SAIFAN KHAN Digitally signed by SAIFAN KHAN Date: 2025.04.02 10:44:45 +0530 Page No.2 of 11 IN TAXC-14-2025 of Income Tax (CIT) dated 14.02.2024, by which the appeal of the appellant herein preferred under Section 246A of the Income Tax Act, 1961 has been dismissed ex-parte on the ground that despite service of notice he did not appear, by recording a finding which is perverse to the record ?” 2. The aforesaid substantial question of law arises for determination on the following factual backdrop: 2.1 The appellant/assessee herein, who is an individual and engaged in the business of trading of computer system and its accessories, filed income-tax return on 31.03.2014 for the assessment year 2013-14 showing a total income of Rs.16,87,250/-. On 28.03.2016, the original assessment was completed under Section 143(3) of the Act of 1961, whereby the total income of the appellant/assessee was assessed as Rs.1,50,84,533/- by estimating net profit @ 8% of sales and thereby making addition of Rs.1,33,97,283/-. 2.2 Feeling aggrieved by the said order of the Assessing Officer, dated 28.03.2016, the appellant/assessee preferred appeal before the Commissioner of Income Tax (Appeals), Raipur (for short the “CIT(A)”), 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 indicates that the appellant is not interested in pursing the appeal Page No.3 of 11 IN TAXC-14-2025 and has nothing to say against the additions made by the Assessing Officer”. Against which, the appellant/assessee preferred appeal before the Income Tax Appellate Tribunal (for short the “ITAT”), Raipur, in which, by order dated 16.05.2019, the matter was remanded to the Assessing Officer for fresh consideration on all the issues raised by the appellant/assess therein after providing reasonable opportunity of being heard. 2.3 In pursuance of the said order passed by the learned ITAT, Raipur dated 16.05.2019, the matter was taken up for fresh assessment by the Assessing Officer, therefore, notices under Section 142(1) of the Act of 1961 alongwith questionnaire were issued to the appellant/assessee on 24.02.2021 & 02.09.2021 through the Income-Tax Business Application (ITBA) portal. Since no response has 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 dated 08.09.2021 under Section 144 of the Act of 1961, but it was not availed off. Ultimately, on 20.09.2021, the Assessing Officer proceeded to close the said assessment proceeding under Section 144 read with Section 254 & 114B of the Act of 1961 and reiterated his earlier assessment order dated 28.03.2016, whereby total income of the appellant/assessee was assessed to be Rs.1,50,84,533/- by estimating net profit @ 8% of sales and thereby making addition of Rs.1,33,97,283/-. The Assessing Officer, while passing fresh Page No.4 of 11 IN TAXC-14-2025 assessment order dated 20.09.2021 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 is remanded by the learned ITAT, Raipur. 2.4 Feeling aggrieved by the said assessment order passed by the Assessing Officer dated 20.09.2021, again for the second time, the appellant/assessee preferred appeal before the CIT(A), which also stood dismissed vide order dated 14.02.2024 on the ground of non- prosecution. Against which, the appellant/assessee filed appeal before the learned ITAT, Raipur, which was also dismissed by order dated 16.08.2024 affirming the orders passed by the CIT(A) and by the Assessing Officer. Questioning the legality, validity and correctness of the said impugned orders, the present appeal has been preferred by the appellant/assess before this Court, which have already been admitted for hearing on the substantial question of law, summarized in Para-01 of this order. 3. Mr. S. Rajeswara Rao, learned counsel appearing for the appellant assailed the said 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 of 1961 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. Learned counsel vehemently argued that mere uploading of notices on the ITBA Page No.5 of 11 IN TAXC-14-2025 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. Learned counsel would rely upon the decision of the High Court of Punjab and Haryana rendered in the matter of Munjal BCU Centre of Innovation and Entrepreneurship v. Commissioner of Income-Tax (Exemptions) 1 to buttress his submission on the point. Hence, the present appeal be allowed in toto. 4. Per-contra, Mr. Ajay Kumari, learned counsel appearing for the respondent-revenue supported the impugned orders and prays for dismissal of the appeal on the ground that the appellant/assessee failed to make compliance and respond to the statutory notices issued by the Assessing Officer as well as by the CIT(A) during the process of assessment and, therefore, the learned CIT(A) and also the leaned ITAT, Raipur have rightly rejected the appeal of the appellant. 5. I have heard learned counsel for the parties, considered their rival submissions made hereinabove and went through the record with utmost circumspection. 6. In case at hand, it is the case of the appellant/assessee that 1 (2024) 1 HCC (P&H) 37 : 2024 SCC Online P&H 1931 Page No.6 of 11 IN TAXC-14-2025 since appellant has not opted for service of notice through e-mail, he could have served by way of physical notice through registered/speed post mode, which has not been done and mere service/uploading of notice on the ITBA portal would not constitute valid service of notice on the appellant in the present case, therefore, the appellant/assessee has been deprived of his opportunity of being heard before the CIT(A) and same has also not been considered by the ITAT, Raipur and dismissed the appeal. 7. In order to consider the plea raised at the bar it would be appropriate to notice Section 282 of the Act of 1961 and Rule 127 of the Income Tax Rules, 1962, which read as under: “282. Service of notice generally. (1) The service of a notice or summon or requisition or order or any other communication under this Act (hereafter in this section referred to as \"communication\") may be made by delivering or transmitting a copy thereof, to the person therein named,- (a) by post or by such courier services as may be approved by the Board; or (b) in such manner as provided under the Code of Civil Procedure, 1908 (5 of 1908) for the purposes of service of summons; or (c) in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000); or (d) by any other means of transmission of documents as provided by rules made by the Board in this behalf. (2) The Board may make rules providing for the addresses (including the address for electronic mail or electronic mail message) to which the communication referred to in sub-section (1) may be delivered or transmitted to the Page No.7 of 11 IN TAXC-14-2025 person therein named. Explanation. - For the purposes of this section, the expressions \"electronic mail\" and \"electronic mail message\" shall have the meanings as assigned to them in Explanation to section 66-A of the Information Technology Act, 2000 (21 of 2000). Rule 127 of the Income Tax Rules, 1962 127. Service of notice, summons, requisition, order and other communication. (1) For the purposes of sub- section (1) of section 282, the addresses (including the address for electronic mail or electronic mail message) to which a notice or summons or requisition or order or any other communication under the Act (hereafter in this rule referred to as \"communication\") may be delivered or transmitted shall be as per sub-rule (2). (2) The addresses referred to in sub-rule (1) shall be- (a) for communications delivered or transmitted in the manner provided in clause (a) or clause (b) of sub- section (1) of section 282- (i) the address available in the PAN database of the addressee; or (ii) the address available in the income-tax return to which the communication relates; or (iii) the address available in the last income-tax return furnished by the addressee; or (iv) in the case of addressee being a company, address of registered office as available on the website of Ministry of Corporate Affairs: Provided that the communication shall not be delivered or transmitted to the address mentioned in item (i) to (iv) where the addressee furnishes in writing any other address for the purposes of communication to the income-tax authority or any person authorised by such authority issuing the communication: Provided further that where the communication cannot be delivered or transmitted to the address mentioned in item (i) to (iv) or any other address Page No.8 of 11 IN TAXC-14-2025 furnished by the addressee as referred to in first proviso, the communication shall be delivered or transmitted to the following address: (i) the address of the assessee as available with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of the said Act); or (ii) the address of the assessee as available with the Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898); or (iii) the address of the assessee as available with the insurer as defined in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938); or (iv) the address of the assessee as furnished in Form No.61 to the Director of Income-tax (Intelligence and Criminal Investigation) or to the Joint Director of Income-tax (Intelligence and Criminal Investigation) under sub-rule (1) of rule 114D; or (v) the address of the assessee as furnished in Form No.61A under sub-rule (1) of rule 114E to the Director of Income-tax (Intelligence and Criminal Investigation) or to the Joint Director of Income-tax (Intelligence and Criminal Investigation); or (vi) the address of the assessee as available in the records of the Government; or (vii) the address of the assessee as available in the records of a local authority as referred to in the Explanation below clause (20) of section 10 of the Act. (b) for communications delivered or transmitted electronically: (i) e-mail address available in the income-tax return furnished by the addressee to which the communication relates; or Page No.9 of 11 IN TAXC-14-2025 (ii) the e-mail address available in the last income- tax return furnished by the addressee; or (iii) in the case of addressee being a company, e- mail address of the company as available on the website of Ministry of Corporate Affairs; or (iv) any e-mail address made available by the addressee to the income-tax authority or any person authorised by such income-tax authority. (3) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall specify the procedure, formats and standards for ensuring secure transmission of electronic communication and shall also be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to such communication.” 8. Coming to the facts of the present case in light of the above- quoted statutory provisions, it is quite vivid that 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 has been sent on appellant’s old email address and also uploaded on ITBA portal. In this regard, the decision of the Munjal BCU Centre of Innovation and Entrepreneurship (supra) may be noticed herein profitably wherein it has clearly been held that service of notice on ITBA portal (e-portal) is not a valid piece of service and observed in Para-08 to 10 as under: “8. In view of the above, 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 Page No.10 of 11 IN TAXC-14-2025 \"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. 9. Having noticed as above, this Court is of the firm view that the petitioner has not been given sufficient opportunity to put up his pleas with regard to the proceedings under Section 12A(1)(ac)(iii) of the Act of 1961 and as he was not served with any notice. Therefore, he would be entitled to file his reply and the Department would of course be entitled to examine the same and pass a fresh order thereafter. 10. In view of the above, Writ Petition is allowed and the order dated 16.01.2023 (Annexure P-5) is quashed and set aside. The Department would provide an opportunity of hearing to the petitioner and they will also allow the petitioner to appear personally for the purpose and pass a speaking order independent of the order passed earlier by them on 16.01.2023. The same shall be done expeditiously provided the petitioner file his reply within a period of three weeks.” 9. In that view of the matter, since the appellant/assessee did not opt for service of notice through e-mail and even it is not the case of the respondent-revenue that the appellant has 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 of 1961 and Rule 127 of the Income Tax Rules, 1962 following the principles of law rendered in the matter of Munjal BCU Centre of Innovation and Entrepreneurship (supra) uploading of notice on Page No.11 of 11 IN TAXC-14-2025 ITBA portal (e-portal) cannot be treated to be a valid service of notice, we are of the considered opinion that the orders passed by the CIT (A) and by the learned ITAT, Raipur dated 14.02.2024 & 16.08.2024 respectively, dismissing the appeals of the appellant on the ground of non-prosecution, are liable to be set aside being bad and illegal. 10. Accordingly, the order passed orders passed by the CIT (A) and by the learned ITAT, Raipur dated 14.02.2024 & 16.08.2024 respectively are hereby set aside/quashed. The matter is remitted to the CIT(A) concerned for considering the matter afresh after providing due opportunity of hearing to the appellant/assessee as well as to the respondent-revenue and passing of fresh order in accordance with law expeditiously. The parties are directed to appear before the CIT (A) concerned on 24.04.2025 for the said purpose. 11. Consequently, this appeal is allowed to the extent indicated herein above. No cost. Sd/- Sd/- (Sanjay K. Agrawal) (Sanjay Kumar Jaiswal) Judge Judge s@if "