Disputed service of assessment orders and denial of hearing can justify remand for fresh adjudication in tax proceedings.

Disputed service of an assessment order can defeat a limitation dismissal where the assessee credibly pleads non-receipt through the prescribed modes and the record does not rebut delayed knowledge. Proper communication under Rule 127 of the Income-tax Rules is required, and portal service alone was not treated as sufficient on the facts noted. Where an ex parte assessment under section 144 is completed without effective participation, and the assessee is denied a reasonable opportunity at both assessment and appellate stages, the proper course is remand for fresh verification and de novo adjudication without expressing any view on the merits of the capital gains addition.

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Issues: (i) Whether dismissal of the assessee's appeal as time-barred was sustainable when service of the assessment order was disputed and non-receipt through the prescribed modes was pleaded; (ii) whether the ex parte assessment and the addition made by treating the property transaction as short-term capital gain required interference and remand for fresh examination.

Issue (i): Whether dismissal of the assessee's appeal as time-barred was sustainable when service of the assessment order was disputed and non-receipt through the prescribed modes was pleaded.

Analysis: The record showed that the assessee asserted non-receipt of the assessment order either through the portal or by email, and the appellate authority did not properly deal with that explanation. The applicable service procedure under Rule 127 of the Income-tax Rules, 1962 required proper communication, and service through the portal alone was not treated as sufficient on the facts. The explanation for the delay was supported by the sequence of events, and the revenue did not bring material to rebut the claim of delayed knowledge of the order.

Conclusion: The dismissal of the appeal on limitation was not sustained, and the assessee's grievance on delay was accepted.

Issue (ii): Whether the ex parte assessment and the addition made by treating the property transaction as short-term capital gain required interference and remand for fresh examination.

Analysis: The assessment had been completed under section 144 of the Income-tax Act, 1961, and the addition was made without effective participation by the assessee. In view of the disputed service and the absence of rebuttal to the assessee's plea, the assessee was found to have been denied a reasonable opportunity at both the assessment and appellate stages. The proper course was to set aside the matter for fresh verification without expressing any view on the merits of the addition.

Conclusion: The assessment order and the impugned addition were set aside for de novo adjudication by the Assessing Officer with an opportunity of hearing to the assessee.

Final Conclusion: The matter was restored to the Assessing Officer for fresh consideration, and the appeal succeeded only to that extent without any adjudication on the merits of the addition.

Ratio Decidendi: Where service of an assessment order is disputed, compliance with the prescribed mode of communication is essential, and if the assessee is denied a reasonable opportunity at the assessment and appellate stages, the proper remedy is remand for fresh adjudication without a merits determination.

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