CIT(A)’s Ex-Parte Order Quashed for Serving Notices to Previous Counsel’s Email; Matter Remanded

CIT(A)’s Ex-Parte Order Quashed for Serving Notices to Previous Counsel’s Email; Matter Remanded

Issue

1. Service of Notice: Is the service of notice valid if sent to the email ID of the assessee’s previous counsel instead of the email ID specifically mentioned in Form 35?

2. Duty of CIT(A): Can the Commissioner of Income Tax (Appeals) dismiss an appeal ex-parte (without hearing) solely for non-appearance without adjudicating the specific grounds on merits as required under Section 250?

Facts

• Appeals: Six appeals covering Assessment Years 2011-12 to 2013-14 and 2015-16 to 2017-18.

• The Default: The CIT(A) dismissed the appeals ex-parte because the assessee failed to appear for the hearings.

• Assessee’s Defense: The notices were never received. The CIT(A) sent the notices to the email ID of the earlier counsel (e.g., “NKA_63@YAHOO.COM”), whereas the assessee had provided a different/updated email ID in Form 35 (the appeal form).

• Legal Argument: The assessee argued that service was defective. The Department argued that the assessee should not benefit from their failure to appear.

Decision

The Tribunal ruled in favor of the assessee on two counts:

1. Violation of Section 250 (Merits):

• Statutory Duty: Section 250 mandates the CIT(A) to decide the appeal in writing, stating the points for determination, the decision thereon, and the reasons.

• Non-Speaking Order: The CIT(A) merely dismissed the appeal for non-appearance without dwelling on any of the grounds raised. This approach is contrary to the Act. Even in the absence of the assessee, the CIT(A) must pass a “speaking order” on the merits of the case.

2. Defective Service (Section 282):

• Wrong Address: The Tribunal verified that notices were sent to the previous counsel’s email, not the one listed in Form 35.

• Rule Violation: Sending notices to an address other than the one provided in the official form (Form 35) violates the procedure for service under Section 282 read with the relevant Rules.

• Verdict: The order was set aside, and the matter was remanded to the CIT(A) for fresh adjudication after serving notice to the correct email ID. [In favour of assessee/Matter Remanded]

Key Takeaways

• Check Your Form 35: The email ID mentioned in Form 35 is the “official” address for service. If the Department sends notices elsewhere (even to a known previous counsel), the service is invalid.

• Ex-Parte Limitations: The CIT(A) cannot simply “dismiss for default” like a civil court. They act as a quasi-judicial authority and must give a decision on the merits of the tax dispute, even if the taxpayer is absent.

• Update Contact Details: While the assessee won here, this highlights the critical need to ensure that the email ID on the Income Tax Portal and in specific forms (like Form 35) is active and monitored.