Ravindra Kumar Sharma V. National E-Assessment Centre

CW/7061/2021

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The case involves Ravindra Kumar Sharma, the petitioner, challenging an ex-parte assessment order issued by the National E-Assessment Centre, which added substantial amounts to his income for the Assessment Year 2018-19. The petitioner argued that the assessment was conducted without proper notice and opportunity to be heard, as required under the E-assessment Scheme, 2019. The respondent countered that all communications were sent to the email address provided by the petitioner in his last filed Income Tax Return, which was that of his Chartered Accountant. The court examined the compliance with the E-assessment Scheme and found that the notices were duly served as per the registered email address, which was the responsibility of the petitioner to ensure was monitored.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 798231 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 02-12-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ANUROOP SINGHI; N S BHATI
• Assessee Lawyers: PRAKUL KHURANA; RAJAT SHARMA
• Keywords: E-Assessment Scheme 2019; Ex-parte assessment order; Natural Justice; Unexplained Cash Deposits; Unsecured loan
• Section: 143(3); 142(1); 68; 69A; 115BBE

Judgement Text

"[2024:RJ-JP:49488-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 7061/2021 Ravindra Kumar Sharma, S/o Shri Om Prakash Sharma, Aged About 44 Years, R/o 18/137 18/137, Anand Bhawan, Jagdamba Colony, Phulera 303338, Rajasthan ----Petitioner Versus National E-Assessment Centre, Room No. 401, 2Nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi-110003, Through Assistant Commissioner Of Income Tax. ----Respondent For Petitioner(s) : Mr. Prakul Khurana Advocate with Mr. Rajat Sharma Advocate. For Respondent(s) : Mr. Anuroop Singhi Advocate with Mr. N.S. Bhati Advocate. HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE UMA SHANKER VYAS Order 02/12/2024 1. Heard finally with the consent of the parties. 2. This petition under Article 226 of the Constitution of India has been filed challenging ex-parte assessment order dated 29.04.2021. By the order impugned, respondent-Assessing Officer has made an addition of Rs.1,90,87,210/- towards unsecured loan and Rs.3,25,61,500/- towards unexplained cash deposits into the bank, in respect of the Assessment Year 2018-19. The petitioner- assessee has approached this Court without availing alternative remedy seeking to challenge the impugned order on the ground that the ex-parte assessment order has been passed without affording him opportunity of hearing. [2024:RJ-JP:49488-DB] (2 of 13) [CW-7061/2021] 3. The facts of the case, as revealed from the pleadings of the parties, are that the petitioner-assessee filed return of income in respect of Assessment Year 2018-19 on 31.10.2018 declaring his total income as Rs.20,16,130/-. The case of the petitioner- assessee was selected for scrutiny under compulsory selection parameters leading to issuance of statutory notice under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’) on 24.09.2019. According to respondent, notice under Section 142(1) of the Act of 1961 was issued on 14.01.2021 requesting the petitioner-assessee to provide specific details which the petitioner-assessee failed to comply with. According to the respondent, subsequently notices were issued on 17.02.2021, 13.03.2021, 18.03.2021 & 26.03.2021 which the petitioner failed to respond and did not submit any reply within the time stipulated. Thereafter, on verification of available information, it was observed that the petitioner-assessee obtained unsecured loan of Rs.1,90,87,210/-. The petitioner-assessee was requested to provide the required information and furnish identity credit worthiness and genuineness of transactions appearing in the balance sheet. The petitioner did not submit any detail in response to notice dated 14.01.2021. According to the respondent, though number of opportunities were granted to the petitioner-assessee to explain the issue of unsecured loan of Rs.1,90,87,210/- taken during the relevant Assessment Year, but as the petitioner- assessee failed to file reply and furnish any information to explain those transactions, addition was made under Section 68 of the Act of 1961 treating the same as unexplained credit. Similarly, in respect of bank transactions and deposits in the petitioner’s- [2024:RJ-JP:49488-DB] (3 of 13) [CW-7061/2021] assessee accounts for an amount of Rs.3,25,61,500/- also, notices were issued to the petitioner-assessee for clarification but he failed to offer any explanation with regard to the cash deposit and, therefore, in the absence thereof, the cash deposit made by the petitioner-assessee in his bank account were treated as unexplained money under the provisions of Section 69A read with Section 115BBE of the Act of 1961. The aforesaid two additions were, thus, made by way of impugned ex-parte assessment order and the petitioner’s-assessee income was assessed at Rs.5,36,64,840/-. 4. The foremost ground of challenge to the impugned ex-parte assessment order is that there was no due and proper service of notice on the petitioner-assessee, as required under the law. The case of the petitioner-assessee, as pleaded in the writ petition, is that as per the applicable procedure laid down in Clause 10 of the E-assessment Scheme, 2019 (hereinafter referred to as ‘the Scheme of 2019’), every notice or order or any other electronic communication under the Scheme was required to be delivered to the addressee by placing an authenticated copy in the assessee’s registered account or sending an authenticated copy to the registered email address of the assessee or his authorised representative or uploading an authenticated copy on the assessee’s Mobile App. Further the communication was required to be followed by a real time alert with respect to the delivery of the communication. Referring to definition contained in Clause 2 (xx) of the Scheme of 2019, it has been argued that a real time alert by way of Short Messaging Service on registered mobile number or by way of update on petitioner’s-assessee Mobile App or by way [2024:RJ-JP:49488-DB] (4 of 13) [CW-7061/2021] of an email at the registered email address was mandatorily required. However, it is the case of the petitioner-assessee that neither any email has been sent to the petitioner-assessee, nor any SMS was sent on the mobile number with respect to the pendency of the proceedings. According to the petitioner- assessee, notices were sent to the email of his Chartered Accountant, whereas, the primary email ID of the petitioner- assessee has been uploaded in the e-filing portal, yet the email address of the Chartered Accountant was chosen to send communications, whereas, in the past, communications were made on the email address of the petitioner-assessee, details of which have been given in Para 8 of the petition. The respondent sent all the notices for the Assessment Year 2018-19 being notice under Section 143(2) of the Act of 1961 dated 24.09.2021, enquiry notice under Section 142(1) of the Act of 1961 dated 26.03.2021 and show cause notice regarding draft assessment order dated 23.04.2021 on the email ID of his Chartered Accountant, which is neither primary email ID of the petitioner- assessee, nor secondary email ID available on the portal. 5. Further submission of learned counsel for the petitioner is that the Principal Chief Commissioner of Income Tax, National e- assessment Centre, with prior approval of the Central Board of Direct Tax, has laid down SOP for assessment unit under the Scheme vide Circular F. No.PR.CCIT/NeAC/SOP/2020-21 dated 19.11.2020, which includes the SOP for handling non-responsive case by the assessee, SOP for handling address verification requests and SOP for handling untraceable cases. According to the petitioner-assessee, the case was required to be dealt with under [2024:RJ-JP:49488-DB] (5 of 13) [CW-7061/2021] any of the three SOPs treating his case either non-responsive or requiring address verification or treating it to be a non-traceable case. 6. It is also submitted that the period during which the notices were being issued to the petitioner-assessee through email of his Chartered Accountant, that was a COVID period and, therefore, the notices which were sent to the Chartered Accountant were landing into the spam or junk folder of email of the Chartered Accountant, therefore, for this reason also, the petitioner-assessee and his Chartered Accountant was not aware about any ongoing assessment proceedings, as is evident from the email of his Chartered Accountant clarifying the aforesaid circumstance (Annexure-7). 7. On the other hand, learned counsel for the respondent came out with the pointed submission that as per the scheme itself, the email address, as disclosed in the last ITR filed by the petitioner- assessee for the Assessment Year 2018-19, all the notices and communications were sent to the petitioner-assessee on the said mail address. He would submit that as per the definition of email address provided in Clause 2 (xxii) of the Scheme of 2019, it is clearly mentioned that the email address available in the last Income Tax Return furnished by the addressee would be treated as valid email address for service of notice/ communication. Therefore, as per the Scheme of 2019, if services of notices and communications by the respondent are made on the email address mentioned in the ITR or any email, which is belonging to the authorised person of the petitioner, that would amount to sufficient notice and no excuse can be taken that notices were not [2024:RJ-JP:49488-DB] (6 of 13) [CW-7061/2021] sent on any other available email address. The option was on the part of the petitioner-assessee either to mention his own mail address or any other representative. The petitioner-assessee chose to prefer the email address of his Chartered Accountant to be mentioned in the ITR filed by him, therefore, no exception can be taken. Thus, all the communications including notice & draft assessment order were made on the email address given by the petitioner-assessee himself. 8. We have heard learned counsel for the parties, perused the records, pleadings and the documents placed on record. 9. Though the petitioner-assessee has an alternative statutory remedy of filing an appeal, the petitioner-assessee has filed writ petition bypassing his remedy of appeal mainly on the ground that the assessment order has been passed without offering him an opportunity of hearing. The entire case of the petitioner-assessee is built up on the basis that the notices, communications & draft assessment order etc. were being sent on the email address of his Chartered Accountant, whereas, previously the communications, notices & draft assessment orders were always sent on the email address of the petitioner-assessee. 10. Vide Notification dated 12.09.2019, the Central Government in exercise of powers conferred by sub-section (3A) of Section 143 of the Act of 1961 framed scheme known as the Scheme of 2019. Sub-clause (xxii) of Clause 2 of the Scheme of 2019 defines “registered email address” as below:- “(xxii) “registered e-mail address” means the e-mail address at which an electronic communication may be delivered or transmitted to the addressee, including- [2024:RJ-JP:49488-DB] (7 of 13) [CW-7061/2021] (a) the email address available in the electronic filing account of the addressee registered in designated portal; or (b) the e-mail address available in the last income- tax return furnished by the addressee; or (c) the e-mail address available in the Permanent Account Number database relating to the addressee; or (d) in the case of addressee being an individual who possesses the Aadhaar number, the e-mail address of addressee available in the database of Unique Identification Authority of India; or (e) in the case of addressee being a company, the e-mail address of the company as available on the official website of Ministry of Corporate Affairs; or (f) any e-mail address made available by the addressee to the income-tax authority or any person authorised by such authority.” It is clear from the aforesaid definition that “registered email address” amongst other things, would mean the email address available in the last ITR filed by the addressee. In the present case, indisputedly in the last ITR (2018-19) filed by the petitioner- assessee, the email address mentioned was that of the Chartered Accountant of the petitioner-assessee as [e-mail]. No doubt that multiple options have been given under the wide definition of “registered e-mail address”, yet if anyone of them is chosen for service of notices, communications & draft assessment orders, that would be sufficient compliance of legal provisions contained in the Scheme of 2019. 11. Under Clause 4 (2) of the Scheme of 2019, law mandates that all the communications among the assessment unit, review unit, verification unit or technical unit or with the assessee or any [2024:RJ-JP:49488-DB] (8 of 13) [CW-7061/2021] other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under the Scheme shall be through the National e-assessment Centre. The procedure for assessment delineated in Clause 5 of the Scheme of 2019 reveals that all the proceedings have to be drawn in digital mode including service of notice on the assessee under Section 143(2) of the Act of 1961 specifying the issues for selection of a case for assessment followed by response to be given by the assessee and also further steps to be taken. It also provides that once a case is assigned to the assessment unit, it may make a request to the National e-assessment Centre for obtaining necessary information, documents or evidence, conducting enquiry or verification by the verification unit and seeking technical assistance from the technical unit. It further provides that where a draft assessment order modifying the return of income of the assessee is prepared, a copy of the same is required to be sent to the National e- assessment Centre, which may proceed to finalise the assessment as per the draft assessment order after providing an opportunity to the assessee in case the modification is proposed, by serving a notice calling upon him to show cause as to why the assessment proceedings should not be completed as per the draft assessment order. 12. Clause 8 of the Scheme of 2019 mandates that exchange of communications between the National e-assessment Centre and the assessee or his authorised representative shall be exchanged exclusively by an electronic mode. [2024:RJ-JP:49488-DB] (9 of 13) [CW-7061/2021] 13. Clause 10 of the Scheme of 2019, being relevant, is reproduced herein below:- “10. Delivery of electronic record.– (1) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being the assessee, by way of- (a) placing an authenticated copy thereof in the assessee's registered account; or (b) sending an authenticated copy thereof to the registered email address of the assessee or his authorised representative; or (c) uploading an authenticated copy on the assessee's Mobile App; and followed by a real time alert. (2) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being any other person, by sending an authenticated copy thereof to the registered email address of such person, followed by a real time alert. (3) The Assessee shall file his response to any notice or order or any other electronic communication, under this Scheme through his registered account, and once an acknowledgement is sent by the National e-assessment Centre containing the hash result generated upon successful submission of response, the response shall be deemed to be authenticated. (4) The time and place of dispatch and receipt of electronic record shall be determined in accordance with the provision of section 13 of the Information Technology Act, 2000 (21 of 2000).” 14. It is, thus, clear that the mandate of law is to send an authenticated copy of the communication on the registered email address of the assessee or his authorised representative. Moreover, the mode of uploading an authenticated copy on the assessee's Mobile App is optional and alternative as the provisions [2024:RJ-JP:49488-DB] (10 of 13) [CW-7061/2021] contained in Clause 10 of the Scheme of 2019 do not mandate that notices are required to be served, communications are required to be simultaneously made by all the modes provided in (a), (b) & (c). 15. In the present case, it is clear from the response of the respondent that all the notices under Sections 143(3), 142(1) of the Act of 1961 followed by draft assessment order were being sent on that very email address, which was disclosed by the petitioner-assessee in his ITR for the Assessment Year 2018-19. Therefore, the petitioner-assessee cannot raise a grievance that communications ought to have been made on his own email address. 16. The argument of the learned counsel that previous communications were made on his email address, as referred to in Para 8 of the petition, does not come to the aid of the petitioner- assessee for the simple reason that when the petitioner-assessee filed his ITR for the financial Assessment Year 2018-19, he registered the email address of his Chartered Accountant. The respondent has, therefore, sent all the communications on the email address disclosed by him. Whether the email address should be of his own or his Chartered Accountant/representative was an option for the petitioner-assessee. The petitioner-assessee, being fully aware of the provisions of the Scheme of 2019, elected to prefer for all communications, the email address of his Chartered Accountant, which was so disclosed. 17. Lame excuses have been made by stating that the mail sent to the Chartered Accountant were landing in his email’s spam or junk folder. It is not the case that communications made by the [2024:RJ-JP:49488-DB] (11 of 13) [CW-7061/2021] department to the petitioner-assessee were not received on the email address. The communications sent by the Chartered Accountant to the petitioner-assessee on 03.07.2021 (Annexure- 7) is a self serving documents created by his Chartered Accountant only to somehow avoid consequences of the orders passed. By merely stating in the communication that the mail sent were lying under the spam folder, was not good enough. It is not the case of the petitioner-assessee, nor any affidavit of the Chartered Accountant has been filed that the dates on which the communications were being made, the email address was non- functional. A very vague kind of excuse has been made by the petitioner-assessee with the help of his own Chartered Accountant. 18. The petitioner’s-assessee case stands fortified from the fact that he claims to have received communication dated 07.06.2021 that impugned order has been passed against the petitioner- assessee which came to be served on the email address of his Chartered Accountant at [e-mail]. Thus, all previous communications made shortly before the aforesaid communication are claimed to be not received. In the opinion of this Court, the case of the petitioner-assessee is clearly an after thought. It is vividly clear that all communications were made on the email address provided in the ITR of the petitioner-assessee, which were all duly received. 19. Present is not a case where the petitioner-assessee sought indulgence of the Court on the submission that even though all the communications were received, because of the COVID period, Chartered Accountant of the petitioner-assessee, for the reasons [2024:RJ-JP:49488-DB] (12 of 13) [CW-7061/2021] behind their control, could not submit the response/reply to various communications, notices and draft orders. Had that being so, perhaps, this Court would have granted indulgence. The case of the petitioner-assessee is that he was not served with any notice and not that despite having been served with the notice because of pandemic situation, he could not file his reply resulting in passing of impugned ex-parte assessment order. 20. If this Court interferes with the ex-parte assessment order only on the ground of pandemic situation, that would lead to a situation where all the orders passed during pandemic, would be questioned only on this ground despite service having been effected. 21. In view of above consideration, we are of the empathetic view that there is neither violation of principles of natural justice, nor violation of any statutory provisions contained in the Scheme of 2019 so as to call for interference with the ex-parte assessment order. 22. In these circumstances, we are not inclined to go into the merits of the case, but however, give the petitioner-assessee liberty to avail statutory remedy of appeal against the impugned ex-parte assessment order. We further give liberty to the petitioner-assessee to raise all the grounds except the ground of violation of the principles of natural justice. We further clarify that the petitioner-assessee is entitled to explain various transactions and deposits in respect of which additions have been made by impugned ex-parte assessment order and the Appellate Authority shall be obliged under the law to apply its mind to all explanations, if any submitted by the petitioner-assessee. [2024:RJ-JP:49488-DB] (13 of 13) [CW-7061/2021] 23. Taking into consideration that the writ petition remained pending since 2021, it is directed that in case the petitioner- assessee files an appeal within a period of three months, the appeal shall be decided on its own merits without going into the aspect of limitation for filing appeal. Moreover, taking into consideration that the impugned order is ex-parte in nature and huge amount is added to the income and all that has been done during COVID period, petitioner’s-assessee prayer for waiver of pre-deposit shall be given serious consideration. 24. Subject to the aforesaid observations and liberty reserved in favour of the petitioner-assessee, the petition is dismissed. (UMA SHANKER VYAS),J (MANINDRA MOHAN SHRIVASTAVA),CJ SANJAY KUMAWAT-36 "