Nitesh Kumar Goyal v. Deputy Commissioner Of Income Tax Circle-1(1), Raipur, Aaykarbhawan, Near Akashwani, Civil Lines, Raipur, Chhattisgarh.492001

IN 2025:CGHC:14678-DB Digitally signedby SAIFANSAIFANKHANKHANDate:2025.04.0210:44:45 +0530HIGH COURT OF CHHATTISGARH AT BILASPUR AFR 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, AaykarBhawan, Near Akashwani, Civil Lines, Raipur, Chhattisgarh.492001 ... Respondent [Cause-title taken from Case Information System (CIS)] -------------------------------------------------------------------------------------------- For Appellant: Mr. S. Rajeswara Rao, AdvocateFor Respondent:Mr. Ajay Kumrani, Advocate on behalf of Mr.Mr. Amit Choudhari, Advocate ------------------------------------------------------------------------------------------- Division Bench Hon'ble Shri Justice Sanjay K. Agrawal andHon'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 hearingon the following substantial question of law formulated by order ofthis Court dated 09.01.2025:- “Whether the Income Tax Appellate Tribunal isjustified in affirming the order of the Commissioner of Income Tax (CIT) dated 14.02.2024, by which the appeal of the appellant herein preferred underSection 246A of the Income Tax Act, 1961 has beendismissed ex-parte on the ground that despite serviceof notice he did not appear, by recording a findingwhich is perverse to the record ?” 2.The aforesaid substantial question of law arises fordetermination on the following factual backdrop: 2.1The appellant/assessee herein, who is an individual andengaged in the business of trading of computer system and itsaccessories, filed income-tax return on 31.03.2014 for theassessment year 2013-14 showing a total income of Rs.16,87,250/-.On 28.03.2016, the original assessment was completed underSection 143(3) of the Act of 1961, whereby the total income of theappellant/assessee was assessed as Rs.1,50,84,533/- by estimatingnet profit @ 8% of sales and thereby making addition ofRs.1,33,97,283/-. 2.2Feeling aggrieved by the said order of the Assessing Officer,dated 28.03.2016, the appellant/assessee preferred appeal beforethe Commissioner of Income Tax (Appeals), Raipur (for short the“CIT(A)”), which stood dismissed with the observation that “since theappellant failed to make compliance of the notices issued to themand only sought adjournments one after another, therefore, itindicates that the appellant is not interested in pursing the appeal and has nothing to say against the additions made by the AssessingOfficer”. Against which, the appellant/assessee preferred appealbefore the Income Tax Appellate Tribunal (for short the “ITAT”),Raipur, in which, by order dated 16.05.2019, the matter wasremanded to the Assessing Officer for fresh consideration on all theissues raised by the appellant/assess therein after providingreasonable opportunity of being heard. and has nothing to say against the additions made by the AssessingOfficer”. Against which, the appellant/assessee preferred appealbefore the Income Tax Appellate Tribunal (for short the “ITAT”),Raipur, in which, by order dated 16.05.2019, the matter wasremanded to the Assessing Officer for fresh consideration on all theissues raised by the appellant/assess therein after providingreasonable opportunity of being heard. 2.3In pursuance of the said order passed by the learned ITAT,Raipur dated 16.05.2019, the matter was taken up for freshassessment by the Assessing Officer, therefore, notices underSection 142(1) of the Act of 1961 alongwith questionnaire wereissued to the appellant/assessee on 24.02.2021 & 02.09.2021through the Income-Tax Business Application (ITBA) portal. Sinceno response has been submitted/given by the appellant/assessee tothe said statutory notices issued under Section 142(1), theAssessing Officer also issued show cause notice dated 08.09.2021under Section 144 of the Act of 1961, but it was not availed off.Ultimately, on 20.09.2021, the Assessing Officer proceeded to closethe said assessment proceeding under Section 144 read withSection 254 & 114B of the Act of 1961 and reiterated his earlierassessment order dated 28.03.2016, whereby total income of theappellant/assessee was assessed to be Rs.1,50,84,533/- byestimating net profit @ 8% of sales and thereby making addition ofRs.1,33,97,283/-. The Assessing Officer, while passing fresh assessment order dated 20.09.2021 also observed that despiteservice of statutory notices, the appellant/assessee failed to complyor furnish any response to the said notices, for which, the matter isremanded by the learned ITAT, Raipur. 2.4Feeling aggrieved by the said assessment order passed by theAssessing Officer dated 20.09.2021, again for the second time, theappellant/assessee preferred appeal before the CIT(A), which alsostood dismissed vide order dated 14.02.2024 on the ground of non-prosecution. Against which, the appellant/assessee filed appealbefore the learned ITAT, Raipur, which was also dismissed by orderdated 16.08.2024 affirming the orders passed by the CIT(A) and bythe Assessing Officer. Questioning the legality, validity andcorrectness of the said impugned orders, the present appeal hasbeen preferred by the appellant/assess before this Court, whichhave already been admitted for hearing on the substantial questionof law, summarized in Para-01 of this order. 3.Mr. S. Rajeswara Rao, learned counsel appearing for theappellant assailed the said impugned orders on the grounds thatsince in the appeal before the CIT(A) the appellant did not opt forservice of notice through e-mail, therefore, notices under Section142(1) of the Act of 1961 could not be said to be validly served onthe appellant, as the same ought to have been served on theappellant physically by registered or speed post. Learned counselvehemently argued that mere uploading of notices on the ITBA Page No.5 of 11 portal, would not exonerate the respondent-revenue authorities toserve physical notice on the appellant. As such, theappellant/assessee was deprived of its reasonable opportunity ofbeing 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 theHigh 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 hissubmission on the point. Hence, the present appeal be allowed intoto. Page No.5 of 11 portal, would not exonerate the respondent-revenue authorities toserve physical notice on the appellant. As such, theappellant/assessee was deprived of its reasonable opportunity ofbeing 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 theHigh 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 hissubmission on the point. Hence, the present appeal be allowed intoto. 4.Per-contra, Mr. Ajay Kumari, learned counsel appearing for therespondent-revenue supported the impugned orders and prays fordismissal of the appeal on the ground that the appellant/assesseefailed to make compliance and respond to the statutory noticesissued by the Assessing Officer as well as by the CIT(A) during theprocess of assessment and, therefore, the learned CIT(A) and alsothe leaned ITAT, Raipur have rightly rejected the appeal of theappellant. 5.I have heard learned counsel for the parties, considered theirrival submissions made hereinabove and went through the recordwith 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 since appellant has not opted for service of notice through e-mail,he could have served by way of physical notice throughregistered/speed post mode, which has not been done and mereservice/uploading of notice on the ITBA portal would not constitutevalid service of notice on the appellant in the present case,therefore, the appellant/assessee has been deprived of hisopportunity of being heard before the CIT(A) and same has also notbeen considered by the ITAT, Raipur and dismissed the appeal. 7.In order to consider the plea raised at the bar it would beappropriate to notice Section 282 of the Act of 1961 and Rule 127 ofthe Income Tax Rules, 1962, which read as under: “282. Service of notice generally. (1) The service of anotice or summon or requisition or order or any othercommunication under this Act (hereafter in this sectionreferred to as "communication") may be made bydelivering or transmitting a copy thereof, to the persontherein named,- (a) by post or by such courier services as may beapproved by the Board; or (b) in such manner as provided under the Code of CivilProcedure, 1908 (5 of 1908) for the purposes of service ofsummons; or (c) in the form of any electronic record as provided inChapter IV of the Information Technology Act, 2000 (21 of2000); or (d) by any other means of transmission of documents asprovided 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 electronicmail message) to which the communication referred to insub-section (1) may be delivered or transmitted to the person therein named. Explanation. - For the purposes of this section, theexpressions "electronic mail" and "electronic mailmessage" shall have the meanings as assigned to them inExplanation to section 66-A of the InformationTechnology Act, 2000 (21 of 2000). Rule 127 of the Income Tax Rules, 1962 127. Service of notice, summons, requisition, orderand other communication. (1) For the purposes of sub-section (1) of section 282, the addresses (including theaddress for electronic mail or electronic mail message) towhich a notice or summons or requisition or order or anyother communication under the Act (hereafter in this rulereferred to as "communication") may be delivered ortransmitted 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 themanner provided in clause (a) or clause (b) of sub-section (1) of section 282- Rule 127 of the Income Tax Rules, 1962 127. Service of notice, summons, requisition, orderand other communication. (1) For the purposes of sub-section (1) of section 282, the addresses (including theaddress for electronic mail or electronic mail message) towhich a notice or summons or requisition or order or anyother communication under the Act (hereafter in this rulereferred to as "communication") may be delivered ortransmitted 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 themanner provided in clause (a) or clause (b) of sub-section (1) of section 282- (i) the address available in the PAN database of theaddressee; or (ii) the address available in the income-tax return towhich the communication relates; or (iii) the address available in the last income-taxreturn furnished by the addressee; or (iv) in the case of addressee being a company,address of registered office as available on thewebsite of Ministry of Corporate Affairs: Provided that the communication shall not bedelivered or transmitted to the address mentionedin item (i) to (iv) where the addressee furnishes inwriting any other address for the purposes ofcommunication to the income-tax authority orany person authorised by such authority issuingthe communication: Provided further that where the communicationcannot be delivered or transmitted to the addressmentioned in item (i) to (iv) or any other address furnished by the addressee as referred to in firstproviso, the communication shall be delivered ortransmitted to the following address: (i) the address of the assessee as available with abanking company or a co-operative bank to whichthe Banking Regulation Act, 1949 (10 of 1949)applies (including any bank or bankinginstitution referred to in section 51 of the saidAct); or (ii) the address of the assessee as available withthe Post Master General as referred to in clause (j)of section 2 of the Indian Post Office Act, 1898 (6of 1898); or (iii) the address of the assessee as available withthe insurer as defined in clause (9) of section 2 ofthe Insurance Act, 1938 (4 of 1938); or (iv) the address of the assessee as furnished inForm No.61 to the Director of Income-tax(Intelligence and Criminal Investigation) or to theJoint Director of Income-tax (Intelligence andCriminal Investigation) under sub-rule (1) of rule114D; or (v) the address of the assessee as furnished inForm No.61A under sub-rule (1) of rule 114E tothe Director of Income-tax (Intelligence andCriminal Investigation) or to the Joint Director ofIncome-tax(IntelligenceandCriminalInvestigation); or (vi) the address of the assessee as available in therecords of the Government; or (vii) the address of the assessee as available inthe records of a local authority as referred to inthe Explanation below clause (20) of section 10 ofthe Act. (b) for communications delivered or transmittedelectronically: (i) e-mail address available in the income-taxreturn furnished by the addressee to which thecommunication relates; or (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 thewebsite of Ministry of Corporate Affairs; or (iv) any e-mail address made available by theaddressee to the income-tax authority or anyperson 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 forensuringsecuretransmissionofelectroniccommunication and shall also be responsible forformulating and implementing appropriate security,archival and retrieval policies in relation to suchcommunication.” (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 thewebsite of Ministry of Corporate Affairs; or (iv) any e-mail address made available by theaddressee to the income-tax authority or anyperson 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 forensuringsecuretransmissionofelectroniccommunication and shall also be responsible forformulating and implementing appropriate security,archival and retrieval policies in relation to suchcommunication.” 8.Coming to the facts of the present case in light of the above-quoted statutory provisions, it is quite vivid that admittedly theappellant did not opt for service of notice through e-mail mode and,even in the e-mail address mentioned in Form 35, the appellant wasnot served with the notices in appeal, however, the same has beensent on appellant’s old email address and also uploaded on ITBAportal. In this regard, the decision of the Munjal BCU Centre of Innovation and Entrepreneurship (supra) may be noticed hereinprofitably wherein it has clearly been held that service of notice onITBA portal (e-portal) is not a valid piece of service and observed inPara-08 to 10 as under: “8.In view of the above, it is essential that before anyaction is taken, a communication of the notice must bein terms of the provisions as enumerated hereinabove.The provisions do not mention of communication to be "presumed" by placing notice on the e-portal. Apragmatic view has to be adopted always in thesecircumstances. An individual or a Company is notexpected to keep the e-portal of the Department openall the time so as to have knowledge of what theDepartment is supposed to be doing with regard to thesubmissions of forms etc..The principles of naturaljustice are inherent in the income tax provisions andthe same are required to be necessarily followed. 9.Having noticed as above, this Court is of the firmview that the petitioner has not been given sufficientopportunity to put up his pleas with regard to theproceedings under Section 12A(1)(ac)(iii) of the Act of1961 and as he was not served with any notice.Therefore, he would be entitled to file his reply and theDepartment would of course be entitled to examine thesame and pass a fresh order thereafter. 10.In view of the above, Writ Petition is allowed andthe order dated 16.01.2023 (Annexure P-5) is quashedand set aside. The Department would provide anopportunity of hearing to the petitioner and they willalso allow the petitioner to appear personally for thepurpose and pass a speaking order independent of theorder passed earlier by them on 16.01.2023. The sameshall be done expeditiously provided the petitioner filehis reply within a period of three weeks.” 9.In that view of the matter, since the appellant/assessee did notopt for service of notice through e-mail and even it is not the case ofthe respondent-revenue that the appellant has been served with thenotice on his e-mail address mentioned in Form 35 and further inlight of the provisions contained under Section 282 of the Act of1961 and Rule 127 of the Income Tax Rules, 1962 following theprinciples of law rendered in the matter of Munjal BCU Centre of Innovation and Entrepreneurship(supra) uploading of notice on s@if Page No.11 of 11INTAXC-14-2025 ITBA portal (e-portal) cannot be treated to be a valid service ofnotice, we are of the considered opinion that the orders passed bythe CIT (A) and by the learned ITAT, Raipur dated 14.02.2024 &16.08.2024 respectively, dismissing the appeals of the appellant onthe ground of non-prosecution, are liable to be set aside being badand illegal. Innovation and Entrepreneurship(supra) uploading of notice on s@if Page No.11 of 11INTAXC-14-2025 ITBA portal (e-portal) cannot be treated to be a valid service ofnotice, we are of the considered opinion that the orders passed bythe CIT (A) and by the learned ITAT, Raipur dated 14.02.2024 &16.08.2024 respectively, dismissing the appeals of the appellant onthe ground of non-prosecution, are liable to be set aside being badand illegal. 10.Accordingly, the order passed orders passed by the CIT (A) andby the learned ITAT, Raipur dated 14.02.2024 & 16.08.2024respectively are hereby set aside/quashed. The matter is remitted tothe CIT(A) concerned for considering the matter afresh afterproviding due opportunity of hearing to the appellant/assessee aswell as to the respondent-revenue and passing of fresh order inaccordance with law expeditiously. The parties are directed toappear before the CIT (A) concerned on 24.04.2025 for the saidpurpose. 11.Consequently, this appeal is allowed to the extent indicatedherein above. No cost. Sd/- Sd/- (Sanjay K. Agrawal) (Sanjay Kumar Jaiswal) Judge Judge