Failure to Serve Notices on Correct Email Address Invalidates Entire Penalty Proceedings: ITAT:

Failure to Serve Notices on Correct Email Address Invalidates Entire Penalty Proceedings: ITAT The ITAT Delhi deleted the CIT(A)'s order favouring the income tax department on the grounds that Assisi Convent Education Society was never provided a fair opportunity of hearing, which makes the entire penalty proceedings ex parte. The case has been remanded to the CIT(A) for fresh adjudication. The present appeal was filed 538 days late; hence, the Assisi Convent Education Society (appellant) had sought condonation of the delay, citing the key reasons behind the delay in approaching the ITAT.

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The assessee claimed that the notices issued by the CIT(A) were never served via email provided by it in Form No. 35 (i.e., [email protected]). Additionally, the CIT(A) had issued the first notice to the assessee in 2021, after which the next notice was directly issued in February 2024, which was again never served on the aforementioned email address. Consequently, the assessee was not aware of the tax proceedings before the CIT(A) and hence was not aware of the impugned CIT(A) order dated June 30, 2024. It only became aware of the proceedings when its auditors checked the website portal of the department and noticed that penalty proceedings had been initiated against the assessee. Thereafter, the assessee immediately adopted necessary steps to file an appeal before the ITAT Delhi.

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When the tribunal examined the reasons, it found them all genuine and unintentional, hence condoned the delay for 538 days and accepted the appeal. The tribunal noted that the tax authorities had indeed not served the impugned notice and order on the email address mentioned by the assessee in Form No. 35, which concluded the entire penalty proceedings as ex parte. Considering the same, the tribunal set aside the impugned CIT(A) order dated June 30, 2024, and remanded the case back to the CIT(A) with instructions to issue a fresh order after granting the assessee a fair opportunity of making submissions and issuing notice(s) on the email address provided by the assessee in Form No. 36, i.e., [email protected]. Consequently, the appeal was allowed.