ITAT Condones 705-Days Delay and Restores Matter As Notices Sent to Former Consultant’s Email

The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, remanded a case, observing that the notices were sent to an old email address of a former tax consultant.

The assessee, Yogesh Kiranbhai Machhi, a distributor of packed snacks of Gopal Snacks Pvt. Ltd, filed his income tax return (ITR) declaring an income of Rs 4,88,460. His case was selected for scrutiny due to cash deposits. During the assessment, the assessing officer observed a mismatch between the sales reported by M/s. Gopal Snacks and the purchases recorded by the assessee. The AO also compared the sales as per the VAT return with the sales recorded in the Profit and Loss Account and found differences. The AO treated these differences as unexplained and unaccounted, adding Rs 21,07,155 and Rs 20,86,163 to the income of the assessee. The assessee filed an appeal before the CIT(A) but did not succeed.

The taxpayers approached the ITAT, but the appeal was delayed by 705 days. Explaining the delay, the taxpayer said that the notices were sent to his former tax consultant’s email ID, who did not inform the assessee about the same. The Tribunal condoned the delay after finding the explanation reasonable and bona fide.

The taxpayer cited the same reason for non-compliance before CIT(A)’s notices. Even though he was given several opportunities of hearing, he was unable to respond to the notices because they were sent to his former tax consultant’s email ID. He said that the non-compliance was not intentional and happened because the assessee was not aware of the CIT(A)’s notices.

The tribunal noted that the non-compliance was not intentional and happened due to lack of knowledge of the CIT(A)’s communication. The tribunal also noted that the assessee did not comply before the AO.

Citing the principles of natural justice, the Tribunal restored the case to the Assessing Officer for fresh review, directing that a proper opportunity must be given to the assessee.