Ravindra Kumar Sharma v. National E-Assessment Centre, Room

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, AgedAbout 44 Years, R/o 18/137 18/137, Anand Bhawan, JagdambaColony, Phulera 303338, Rajasthan ----Petitioner Versus National E-Assessment Centre, Room No. 401, 2Nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi-110003, ThroughAssistant Commissioner Of Income Tax. ----Respondent For Petitioner(s) For Respondent(s) : Mr. Prakul Khurana Advocate with Mr. Rajat Sharma Advocate. : Mr. Anuroop Singhi Advocate with Mr. N.S. Bhati Advocate. HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVAHON'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 Indiahas been filed challenging ex-parte assessment order dated29.04.2021. By the order impugned, respondent-Assessing Officerhas made an addition of Rs.1,90,87,210/- towards unsecured loanand Rs.3,25,61,500/- towards unexplained cash deposits into thebank, in respect of the Assessment Year 2018-19. The petitioner-assessee has approached this Court without availing alternativeremedy seeking to challenge the impugned order on the groundthat the ex-parte assessment order has been passed withoutaffording him opportunity of hearing. 3.The facts of the case, as revealed from the pleadings of theparties, are that the petitioner-assessee filed return of income inrespect of Assessment Year 2018-19 on 31.10.2018 declaring histotal income as Rs.20,16,130/-. The case of the petitioner-assessee was selected for scrutiny under compulsory selectionparameters leading to issuance of statutory notice under Section143(3) of the Income Tax Act, 1961 (hereinafter referred to as‘the Act of 1961’) on 24.09.2019. According to respondent, noticeunder Section 142(1) of the Act of 1961 was issued on 14.01.2021requesting the petitioner-assessee to provide specific detailswhich the petitioner-assessee failed to comply with. According tothe respondent, subsequently notices were issued on 17.02.2021,13.03.2021, 18.03.2021 & 26.03.2021 which the petitioner failedto respond and did not submit any reply within the timestipulated. Thereafter, on verification of available information, itwas observed that the petitioner-assessee obtained unsecuredloan of Rs.1,90,87,210/-. The petitioner-assessee was requestedto provide the required information and furnish identity creditworthiness and genuineness of transactions appearing in thebalance sheet. The petitioner did not submit any detail in responseto notice dated 14.01.2021. According to the respondent, thoughnumber of opportunities were granted to the petitioner-assesseeto explain the issue of unsecured loan of Rs.1,90,87,210/- takenduring the relevant Assessment Year, but as the petitioner-assessee failed to file reply and furnish any information to explainthose transactions, addition was made under Section 68 of the Actof 1961 treating the same as unexplained credit. Similarly, inrespect of bank transactions and deposits in the petitioner’s- assessee accounts for an amount of Rs.3,25,61,500/- also, noticeswere issued to the petitioner-assessee for clarification but hefailed to offer any explanation with regard to the cash deposit and,therefore, in the absence thereof, the cash deposit made by thepetitioner-assessee in his bank account were treated asunexplained money under the provisions of Section 69A read withSection 115BBE of the Act of 1961. The aforesaid two additionswere, thus, made by way of impugned ex-parte assessment orderand the petitioner’s-assessee income was assessed atRs.5,36,64,840/-. assessee accounts for an amount of Rs.3,25,61,500/- also, noticeswere issued to the petitioner-assessee for clarification but hefailed to offer any explanation with regard to the cash deposit and,therefore, in the absence thereof, the cash deposit made by thepetitioner-assessee in his bank account were treated asunexplained money under the provisions of Section 69A read withSection 115BBE of the Act of 1961. The aforesaid two additionswere, thus, made by way of impugned ex-parte assessment orderand the petitioner’s-assessee income was assessed atRs.5,36,64,840/-. 4.The foremost ground of challenge to the impugned ex-parteassessment order is that there was no due and proper service ofnotice on the petitioner-assessee, as required under the law. Thecase of the petitioner-assessee, as pleaded in the writ petition, isthat as per the applicable procedure laid down in Clause 10 of theE-assessment Scheme, 2019 (hereinafter referred to as ‘theScheme of 2019’), every notice or order or any other electroniccommunication under the Scheme was required to be delivered tothe addressee by placing an authenticated copy in the assessee’sregistered account or sending an authenticated copy to theregistered email address of the assessee or his authorisedrepresentative or uploading an authenticated copy on theassessee’s Mobile App. Further the communication was required tobe followed by a real time alert with respect to the delivery of thecommunication. Referring to definition contained in Clause 2 (xx)of the Scheme of 2019, it has been argued that a real time alertby way of Short Messaging Service on registered mobile numberor by way of update on petitioner’s-assessee Mobile App or by way of an email at the registered email address was mandatorilyrequired. However, it is the case of the petitioner-assessee thatneither any email has been sent to the petitioner-assessee, norany SMS was sent on the mobile number with respect to thependency of the proceedings. According to the petitioner-assessee, notices were sent to the email of his CharteredAccountant, whereas, the primary email ID of the petitioner-assessee has been uploaded in the e-filing portal, yet the emailaddress of the Chartered Accountant was chosen to sendcommunications, whereas, in the past, communications weremade on the email address of the petitioner-assessee, details ofwhich have been given in Para 8 of the petition. The respondentsent all the notices for the Assessment Year 2018-19 being noticeunder Section 143(2) of the Act of 1961 dated 24.09.2021,enquiry notice under Section 142(1) of the Act of 1961 dated26.03.2021 and show cause notice regarding draft assessmentorder dated 23.04.2021 on the email ID of his CharteredAccountant, 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 isthat the Principal Chief Commissioner of Income Tax, National e-assessment Centre, with prior approval of the Central Board ofDirect Tax, has laid down SOP for assessment unit under theScheme vide Circular F. No.PR.CCIT/NeAC/SOP/2020-21 dated19.11.2020, which includes the SOP for handling non-responsivecase by the assessee, SOP for handling address verificationrequests and SOP for handling untraceable cases. According to thepetitioner-assessee, the case was required to be dealt with under any of the three SOPs treating his case either non-responsive orrequiring address verification or treating it to be a non-traceablecase. 5.Further submission of learned counsel for the petitioner isthat the Principal Chief Commissioner of Income Tax, National e-assessment Centre, with prior approval of the Central Board ofDirect Tax, has laid down SOP for assessment unit under theScheme vide Circular F. No.PR.CCIT/NeAC/SOP/2020-21 dated19.11.2020, which includes the SOP for handling non-responsivecase by the assessee, SOP for handling address verificationrequests and SOP for handling untraceable cases. According to thepetitioner-assessee, the case was required to be dealt with under any of the three SOPs treating his case either non-responsive orrequiring address verification or treating it to be a non-traceablecase. 6.It is also submitted that the period during which the noticeswere being issued to the petitioner-assessee through email of hisChartered Accountant, that was a COVID period and, therefore,the notices which were sent to the Chartered Accountant werelanding into the spam or junk folder of email of the CharteredAccountant, therefore, for this reason also, the petitioner-assesseeand his Chartered Accountant was not aware about any ongoingassessment proceedings, as is evident from the email of hisChartered Accountant clarifying the aforesaid circumstance(Annexure-7). 7.On the other hand, learned counsel for the respondent cameout with the pointed submission that as per the scheme itself, theemail address, as disclosed in the last ITR filed by the petitioner-assessee for the Assessment Year 2018-19, all the notices andcommunications were sent to the petitioner-assessee on the saidmail address. He would submit that as per the definition of emailaddress provided in Clause 2 (xxii) of the Scheme of 2019, it isclearly mentioned that the email address available in the lastIncome Tax Return furnished by the addressee would be treatedas valid email address for service of notice/ communication.Therefore, as per the Scheme of 2019, if services of notices andcommunications by the respondent are made on the email addressmentioned in the ITR or any email, which is belonging to theauthorised person of the petitioner, that would amount tosufficient notice and no excuse can be taken that notices were not sent on any other available email address. The option was on thepart of the petitioner-assessee either to mention his own mailaddress or any other representative. The petitioner-assesseechose to prefer the email address of his Chartered Accountant tobe mentioned in the ITR filed by him, therefore, no exception canbe taken. Thus, all the communications including notice & draftassessment order were made on the email address given by thepetitioner-assessee himself. 8.We have heard learned counsel for the parties, perused therecords, pleadings and the documents placed on record. 9.Though the petitioner-assessee has an alternative statutoryremedy of filing an appeal, the petitioner-assessee has filed writpetition bypassing his remedy of appeal mainly on the ground thatthe assessment order has been passed without offering him anopportunity of hearing. The entire case of the petitioner-assesseeis built up on the basis that the notices, communications & draftassessment order etc. were being sent on the email address of hisChartered Accountant, whereas, previously the communications,notices & draft assessment orders were always sent on the emailaddress of the petitioner-assessee. 10.Vide Notification dated 12.09.2019, the Central Governmentin exercise of powers conferred by sub-section (3A) of Section 143of 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-mailaddress at which an electronic communication may bedelivered or transmitted to the addressee, including- (a) the email address available in the electronicfiling account of the addressee registered indesignated portal; or 10.Vide Notification dated 12.09.2019, the Central Governmentin exercise of powers conferred by sub-section (3A) of Section 143of 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-mailaddress at which an electronic communication may bedelivered or transmitted to the addressee, including- (a) the email address available in the electronicfiling account of the addressee registered indesignated 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 PermanentAccount Number database relating to theaddressee; or (d) in the case of addressee being an individual whopossesses the Aadhaar number, the e-mail addressof addressee available in the database of UniqueIdentification Authority of India; or (e) in the case of addressee being a company, thee-mail address of the company as available on theofficial website of Ministry of Corporate Affairs; or (f) any e-mail address made available by theaddressee to the income-tax authority or anyperson authorised by such authority.” It is clear from the aforesaid definition that “registered emailaddress” amongst other things, would mean the email addressavailable in the last ITR filed by the addressee. In the presentcase, indisputedly in the last ITR (2018-19) filed by the petitioner-assessee, the email address mentioned was that of the CharteredAccountant of the petitioner-assessee as . No doubt that multiple options have been given under thewide definition of “registered e-mail address”, yet if anyone ofthem is chosen for service of notices, communications & draftassessment orders, that would be sufficient compliance of legalprovisions contained in the Scheme of 2019. 11.Under Clause 4 (2) of the Scheme of 2019, law mandatesthat all the communications among the assessment unit, reviewunit, verification unit or technical unit or with the assessee or any other person with respect to the information or documents orevidence or any other details, as may be necessary for thepurposes of making an assessment under the Scheme shall bethrough the National e-assessment Centre. The procedure forassessment delineated in Clause 5 of the Scheme of 2019 revealsthat all the proceedings have to be drawn in digital mode includingservice of notice on the assessee under Section 143(2) of the Actof 1961 specifying the issues for selection of a case forassessment followed by response to be given by the assessee andalso further steps to be taken. It also provides that once a case isassigned to the assessment unit, it may make a request to theNational e-assessment Centre for obtaining necessary information,documents or evidence, conducting enquiry or verification by theverification unit and seeking technical assistance from thetechnical unit. It further provides that where a draft assessmentorder 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 assessmentas per the draft assessment order after providing an opportunityto the assessee in case the modification is proposed, by serving anotice calling upon him to show cause as to why the assessmentproceedings should not be completed as per the draft assessmentorder. 12.Clause 8 of the Scheme of 2019 mandates that exchange ofcommunications between the National e-assessment Centre andthe assessee or his authorised representative shall be exchangedexclusively by an electronic mode. 13.Clause 10 of the Scheme of 2019, being relevant, is reproduced herein below:- “10. Delivery of electronic record.– (1) Every notice ororder or any other electronic communication under thisScheme shall be delivered to the addressee, being theassessee, by way of- 12.Clause 8 of the Scheme of 2019 mandates that exchange ofcommunications between the National e-assessment Centre andthe assessee or his authorised representative shall be exchangedexclusively by an electronic mode. 13.Clause 10 of the Scheme of 2019, being relevant, is reproduced herein below:- “10. Delivery of electronic record.– (1) Every notice ororder or any other electronic communication under thisScheme shall be delivered to the addressee, being theassessee, by way of- (a) placing an authenticated copy thereof in theassessee's registered account; or (b) sending an authenticated copy thereof to theregistered email address of the assessee or hisauthorised representative; or (c) uploading an authenticated copy on theassessee's Mobile App; and followed by a real time alert. (2) Every notice or order or any other electroniccommunication under this Scheme shall be delivered to theaddressee, being any other person, by sending anauthenticated copy thereof to the registered email addressof such person, followed by a real time alert. (3) The Assessee shall file his response to any notice ororder or any other electronic communication, under thisScheme through his registered account, and once anacknowledgement is sent by the National e-assessmentCentre containing the hash result generated upon successfulsubmission of response, the response shall be deemed to beauthenticated. (4) The time and place of dispatch and receipt of electronicrecord shall be determined in accordance with the provisionof section 13 of the Information Technology Act, 2000 (21 of2000).” 14.It is, thus, clear that the mandate of law is to send anauthenticated copy of the communication on the registered emailaddress of the assessee or his authorised representative.Moreover, the mode of uploading an authenticated copy on theassessee's Mobile App is optional and alternative as the provisions contained in Clause 10 of the Scheme of 2019 do not mandatethat notices are required to be served, communications arerequired 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 therespondent that all the notices under Sections 143(3), 142(1) ofthe Act of 1961 followed by draft assessment order were beingsent on that very email address, which was disclosed by thepetitioner-assessee in his ITR for the Assessment Year 2018-19.Therefore, the petitioner-assessee cannot raise a grievance thatcommunications ought to have been made on his own emailaddress. 16.The argument of the learned counsel that previouscommunications were made on his email address, as referred to inPara 8 of the petition, does not come to the aid of the petitioner-assessee for the simple reason that when the petitioner-assesseefiled his ITR for the financial Assessment Year 2018-19, heregistered the email address of his Chartered Accountant. Therespondent has, therefore, sent all the communications on theemail address disclosed by him. Whether the email address shouldbe of his own or his Chartered Accountant/representative was anoption for the petitioner-assessee. The petitioner-assessee, beingfully aware of the provisions of the Scheme of 2019, elected toprefer for all communications, the email address of his CharteredAccountant, which was so disclosed. 17.Lame excuses have been made by stating that the mail sentto the Chartered Accountant were landing in his email’s spam orjunk folder. It is not the case that communications made by the 17.Lame excuses have been made by stating that the mail sentto the Chartered Accountant were landing in his email’s spam orjunk folder. It is not the case that communications made by the department to the petitioner-assessee were not received on theemail address. The communications sent by the CharteredAccountant to the petitioner-assessee on 03.07.2021 (Annexure-7) is a self serving documents created by his CharteredAccountant only to somehow avoid consequences of the orderspassed. By merely stating in the communication that the mail sentwere lying under the spam folder, was not good enough. It is notthe case of the petitioner-assessee, nor any affidavit of theChartered Accountant has been filed that the dates on which thecommunications were being made, the email address was non-functional. A very vague kind of excuse has been made by thepetitioner-assessee with the help of his own CharteredAccountant. 18.The petitioner’s-assessee case stands fortified from the factthat he claims to have received communication dated 07.06.2021that impugned order has been passed against the petitioner-assessee which came to be served on the email address of hisChartered Accountant at . Thus, allprevious communications made shortly before the aforesaidcommunication are claimed to be not received. In the opinion ofthis Court, the case of the petitioner-assessee is clearly an afterthought. It is vividly clear that all communications were made onthe 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 soughtindulgence of the Court on the submission that even though all thecommunications were received, because of the COVID period,Chartered Accountant of the petitioner-assessee, for the reasons behind their control, could not submit the response/reply tovarious communications, notices and draft orders. Had that beingso, perhaps, this Court would have granted indulgence. The caseof the petitioner-assessee is that he was not served with anynotice and not that despite having been served with the noticebecause of pandemic situation, he could not file his reply resultingin passing of impugned ex-parte assessment order. 20.If this Court interferes with the ex-parte assessment orderonly on the ground of pandemic situation, that would lead to asituation where all the orders passed during pandemic, would bequestioned only on this ground despite service having beeneffected. 21.In view of above consideration, we are of the empatheticview that there is neither violation of principles of natural justice,nor violation of any statutory provisions contained in the Schemeof 2019 so as to call for interference with the ex-parte assessmentorder. 22.In these circumstances, we are not inclined to go into themerits of the case, but however, give the petitioner-assesseeliberty to avail statutory remedy of appeal against the impugnedex-parte assessment order. We further give liberty to thepetitioner-assessee to raise all the grounds except the ground ofviolation of the principles of natural justice. We further clarify thatthe petitioner-assessee is entitled to explain various transactionsand deposits in respect of which additions have been made byimpugned ex-parte assessment order and the Appellate Authorityshall be obliged under the law to apply its mind to allexplanations, if any submitted by the petitioner-assessee. 22.In these circumstances, we are not inclined to go into themerits of the case, but however, give the petitioner-assesseeliberty to avail statutory remedy of appeal against the impugnedex-parte assessment order. We further give liberty to thepetitioner-assessee to raise all the grounds except the ground ofviolation of the principles of natural justice. We further clarify thatthe petitioner-assessee is entitled to explain various transactionsand deposits in respect of which additions have been made byimpugned ex-parte assessment order and the Appellate Authorityshall be obliged under the law to apply its mind to allexplanations, if any submitted by the petitioner-assessee. 23.Taking into consideration that the writ petition remainedpending since 2021, it is directed that in case the petitioner-assessee files an appeal within a period of three months, theappeal shall be decided on its own merits without going into theaspect of limitation for filing appeal. Moreover, taking intoconsideration that the impugned order is ex-parte in nature andhuge amount is added to the income and all that has been doneduring COVID period, petitioner’s-assessee prayer for waiver ofpre-deposit shall be given serious consideration. 24.Subject to the aforesaid observations and liberty reserved infavour of the petitioner-assessee, the petition is dismissed. (UMA SHANKER VYAS),J(MANINDRA MOHAN SHRIVASTAVA),CJ SANJAY KUMAWAT-36