Setting Aside Ex-Parte Orders Due to Improper Notice Service (AY 2015-16)

1. Background of the Case

Reopening (Section 147): The case was reopened after the Assessing Officer (AO) identified potential escapement of income related to interest earnings and transactions of immovable property.
Ex-Parte Assessment (Section 144): During the reassessment, the assessee allegedly failed to comply with notices issued under Section 142(1) and Section 148. Consequently, the AO completed the assessment under Section 144 (Best Judgment Assessment), making significant additions, likely under Section 68 (Cash Credits).
First Appeal (Section 250): The assessee appealed to the Commissioner of Income Tax (Appeals). However, the CIT(A) dismissed the appeal for non-prosecution (non-appearance), as notices for hearing were also not responded to.

2. Assessee’s Contention

The assessee argued that the non-compliance was not deliberate but was due to reasonable cause:

Incorrect Contact Details: All notices from the ITBA (Income Tax Business Application) portal were directed to an erroneous email address.
Natural Justice: Because the assessee never received the communications, they were deprived of a fair opportunity to substantiate their claims or contest the additions on merit.

3. Judicial Findings and Ruling

The Tribunal (ITAT) or High Court observed that effective service of notice is a foundational requirement for any valid adjudication.

Failure of Procedure: If notices are sent to a “fallacious” or “wrong” email ID, the resulting ex-parte orders are unsustainable as they violate the Principles of Natural Justice.
Mandatory Hearing: The role of the tax authority is not just to collect tax but to act as an adjudicator. A matter should ideally be decided on merits rather than being dismissed summarily for non-prosecution.

4. Conclusion and Direction

The Court/Tribunal set aside the ex-parte orders of both the AO and the CIT(A).

Remand for Fresh Adjudication: The matter was restored (remanded) to the file of the Assessing Officer.
Reasonable Opportunity: The AO was directed to provide a fresh and meaningful opportunity for the assessee to be heard and to submit necessary evidence regarding the property transactions and interest income.

Key Takeaway for Taxpayers

Always verify that your primary email address and mobile number are updated on the e-filing portal profile. While “wrong email” is a valid ground for remand, it leads to prolonged litigation. Under Section 282 and Rule 127, the department is generally allowed to use the email provided in the last filed return or the PAN database; ensuring these are current is the taxpayer’s first line of defense.

IN THE ITAT DELHI BENCH ‘F’

Anil Kapoor

Income-tax Officer^*

VIMAL KUMAR, JUDICIAL MEMBER
AND S RIFAUR RAHMAN, ACCOUNTANT MEMBER

IT APPEAL NO. 8275 (DEL) OF 2025
[ASSESSMENT YEAR 2015-16]

FEBRUARY 4, 2026

Sameer Kapoor, CA for the Appellant. Ms. Harpreet Kaur Hansra, Sr. DR for the Respondent.

ORDER

Vimal Kumar, Judicial Member.- The appeal filed by the assessee is against order dated 09.01.2025 of Learned Commissioner of Income Tax (Appeals) (hereinafter referred to as ‘The CIT(A)’) u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of assessment order dated 21.03.2023 of Ld. Assessing Officer/Assessment Unit (hereinafter referred to as ‘Ld. AO’), u/s 144 r.w.s 147 of the Act for AY: 2015-16.

2. Brief facts of case are that the case of assessee was selected for reassessment proceeding u/s 147 of the Act for AY: 2015-16 as there was escapement of income to the tune of Rs.52,49,376/- in the case of assessee. The assessee had made following transactions during the Financial Year 2014-15 relevant to Assessment Year 2015-16 as under:

Information Description	Amount (Rs.)
Sale of Immovable Property	18,00,000/-
Sale of Immovable property	33,33,334/-
Interest other than interest on Securities	1,16,042/-
Total escapement	52,49,376/-

3. However, notices/letters as follows were issued which were not complied and no supporting documents were submitted, the details of which are as under:

Type of notice/communi cation	Date of notice/communi cation	Date of complia nce given	Respons e of the assessee received/ not received	Date of respons e, if received	Response type(full/part/a djournment	Remarks, if any
Notice u/s 142(1) of the Act	14.10.2022	31.10.20 22	Not received	–	–	Not complied
Notice u/s 142(1) of the Act	03.11.2022	12.11.2022	Not received	–	–	Not complied
Letter for making compliance	25.11.2-22	30.11.20 22	Not received	–	–	Not complied
SCN for passing order u/s 144	06.01.2023	12.01.20 23	Not received	–	–	Not complied
Centralised communication	25.01.2023	Immedia te	Not received so far	–	–	Not complied
Final Show Cause Notice with details of proposed addition	06.02.2023	17.02.20 23	Received	17.02.2 023	Part	No supporting documents are submitted

4. On completion of proceedings ld. AO vide order dated 21.03.2023 made additions of Rs.51,33,334/- from the sale of immovable property and Rs.01,45,553/- on account of interest income.

5. Against the order dated 21.03.2023 of ld. AO assessee filed appeal before the ld. CIT(A) which was dismissed vide order dated 09.01.2025.

6. Being aggrieved the appellant assessee preferred present appeal on following grounds;

“Ground No. 01

Ld. CIT(A) has erred in law and facts of the case in issuing notices to an incorrect/wrong e-mail address to the assessee.

Ground No. 02

Ld. CIT(A) has erred in law and facts of the case in upholding an assessment order u/s 147 r.w.s 144 of the Income Tax Act 1961.

Ground No. 03

Ld. CIT(A) has erred in law and facts of the case in in dismissing the appeal filed by the assessee against the disallowance of Rs. 51,33,334/- on account of Indexed Cost of acquisition and Indexed Cost of improvement.

Ground No. 04

Ld. CIT(A) has erred in law and facts of the case in dismissing the appeal filed by the assessee against the additions of Rs. 1,45,553/- as Interest Income.

Ground No. 05

The assessee may please be allowed the right to add/delete/modify any of the grounds of appeal at any stage.”

7. Ld. Authorized Representative for appellant assessee submitted that due to furnish of wrong email assessee could not comply with several notices during assessment proceedings and could not attend to the appellate proceedings. So, the matter may be restore to the file of ld. AO.

8. Ld. Departmental Representative had no objection.

9. From examination of record in light of aforesaid rival contention it is crystal clear that ld. CIT(A) vide order dated 09.01.2025 dismissed the appeal as there was no response to various notices for hearing by the assessee. During the assessment proceedings the assessee could not comply with the various notices and file documents. Assessee claims that due to giving of wrong email the assessee could not comply with the directions of the Departmental authorities. Prayer for restoring the matter to the file of Ld. AO has been made and ld. DR has no objection.

10. In view of above material facts and interest of justice it is considered expedient to set aside the orders dated 09.01.2025 of ld. CIT(A) and 21.03. 2023 of ld. AO and restore the matter to the file of ld. AO for fresh decision in accordance with law after affording fair opportunities of hearing to the appellant assessee.

11. In the result, the appeal of the assessee is allowed for statistical purposes.