2025 (4) TMI 337 - HC - Income Tax

HC quashes dismissal orders for invalid e-portal service under Section 282 Income Tax Act

Nitesh Kumar Goyal Versus Deputy Commissioner of Income Tax Circle-1 (1), Raipur.

The HC set aside orders by CIT(A) and ITAT dismissing appellant's appeal ex-parte for non-appearance. The court held that service of notice through ITBA ... ITAT affirming the order of CIT who dismissed the appeal of the appellant ex-parte on the grounds of non-appearance - Method of service of notice - validity of service of notice on ITBA portal (e-portal) - HELD THAT:- As it is quite vivid that admittedly the appellant did not opt for service of notice through e-mail mode and, even in the e-mail address mentioned in Form 35, the appellant was not served with the notices in appeal, however, the same has been sent on appellant’s old email address and also uploaded on ITBA portal. In this regard, the decision of the Munjal BCU Centre of Innovation and Entrepreneurship [2024 (3) TMI 479 - PUNJAB & HARYANA HIGH COURT] may be noticed herein profitably wherein it has clearly been held that service of notice on ITBA portal (e-portal) is not a valid piece of service. Since the appellant/assessee did not opt for service of notice through e-mail and even it is not the case of the respondent-revenue that the appellant has been served with the notice on his e-mail address mentioned in Form 35 and further in light of the provisions contained under Section 282 of the Act of 1961 and Rule 127 of the Income Tax Rules, 1962 following the principles of law rendered in the matter of Munjal BCU Centre of Innovation and Entrepreneurship (supra) uploading of notice on ITBA portal (e-portal) cannot be treated to be a valid service of notice, we are of the considered opinion that the orders passed by the CIT (A) and by the learned ITAT, Raipur dismissing the appeals of the appellant on the ground of non-prosecution, are liable to be set aside being bad and illegal. ISSUES PRESENTED and CONSIDEREDThe core legal issue considered in this judgment is whether the Income Tax Appellate Tribunal (ITAT) was justified in affirming the order of the Commissioner of Income Tax (CIT) which dismissed the appeal of the appellant ex-parte on the grounds of non-appearance, despite service of notice. The appellant contends that the notices were not validly served, as they were only uploaded on the ITBA portal and not physically delivered, thereby depriving them of a reasonable opportunity to be heard.ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and PrecedentsThe legal framework revolves around Section 282 of the Income Tax Act, 1961, and Rule 127 of the Income Tax Rules, 1962, which outline the methods of service of notice. These provisions allow for service by post, courier, electronic record, or other means as prescribed. The case of Munjal BCU Centre of Innovation and Entrepreneurship v. Commissioner of Income-Tax was cited, emphasizing that service of notice solely through an electronic portal does not constitute valid service.Court's Interpretation and ReasoningThe Court interpreted that the appellant did not opt for service of notice via e-mail, and the notices were not served on the e-mail address provided in Form 35. Instead, they were sent to an old e-mail address and uploaded on the ITBA portal. The Court found that this method of service did not comply with the statutory provisions, as it did not provide the appellant a fair opportunity to respond.Key Evidence and FindingsThe key finding was that the appellant was not properly served with the notices as per the statutory requirements. The Court emphasized that the principles of natural justice were not followed, as the appellant was not given a fair chance to present their case due to the improper service of notice.Application of Law to FactsThe Court applied the provisions of Section 282 and Rule 127 to determine that the service of notice through the ITBA portal was insufficient. The lack of physical or proper electronic service meant that the appellant was not afforded a reasonable opportunity to be heard, which is a fundamental aspect of procedural fairness.Treatment of Competing ArgumentsThe appellant argued that the service of notice was invalid as it was not physically delivered or sent to the correct e-mail address. The respondent-revenue contended that the appellant failed to comply with the notices. The Court sided with the appellant, emphasizing the need for proper service to ensure a fair hearing process.ConclusionsThe Court concluded that the orders dismissing the appellant's appeals on the grounds of non-prosecution were invalid due to improper service of notice. The Court set aside these orders and remitted the matter back to the CIT(A) for reconsideration with proper notice and opportunity for the appellant to be heard.SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal ReasoningThe Court cited the Munjal BCU Centre case, stating, 'service of notice on ITBA portal (e-portal) is not a valid piece of service,' reinforcing the requirement for proper notice delivery.Core Principles EstablishedThe judgment reinforced the principle that proper service of notice is essential for ensuring a fair opportunity to be heard, in line with natural justice principles. It highlighted the necessity for compliance with statutory provisions regarding notice service.Final Determinations on Each IssueThe Court determined that the orders of the CIT(A) and ITAT were invalid due to improper service of notice, and the case was remitted for fresh consideration. The parties were directed to appear before the CIT(A) for a new hearing, ensuring that the appellant receives a fair opportunity to present their case.