Taxpayer Can't Be Absolved Of Earlier Lapses Because Final Notice Went To Different Email: ITAT Ahmedabad

The Income Tax Appellate Tribunal (ITAT) in Ahmedabad has held that a taxpayer who was aware of ongoing appellate proceedings cannot avoid the consequences of earlier non-compliance merely because the final notice was sent to a different email address.

A division bench of Judicial Member T.R. Senthil Kumar and Accountant Member Narendra Prasad Sinha made the observation while allowing an appeal filed by Arvind Mevalal Panchal for statistical purposes against an order of the National Faceless Appeal Centre (NFAC) for the assessment year 2018-19.

"The assessee was aware of the on-going proceeding before the Ld. CIT(A). Merely because the last notice of the CIT(A) was sent on a different e-mail Id, the assessee cannot be absolved of his earlier lapses," the bench observed.

The taxpayer had filed his return for the assessment year 2018-19 declaring total income of ₹2.98 lakh. He disclosed turnover of ₹34.33 lakh and declared profit at 8% under the presumptive taxation scheme.

The assessment records showed that deposits of ₹1.37 crore had been made in the taxpayer's bank account and turnover to the extent of ₹1 crore was found to be unaccounted. The assessment was subsequently reopened and an addition of ₹1.37 crore was made on account of unexplained money.

Aggrieved by the assessment order, the taxpayer filed an appeal before the first appellate authority. The appeal was dismissed, following which he approached the Tribunal.

Before the Tribunal, the taxpayer contended that no compliance could be made before the Commissioner of Income Tax (Appeals) because notices had been sent to an email address different from the one mentioned in Form No. 35. He therefore sought another opportunity before the appellate authority.

The Revenue opposed the plea and pointed out that the taxpayer had sought adjournments on two occasions before the appellate authority, demonstrating that he was aware of the proceedings.

The Tribunal noted that the Commissioner of Income Tax (Appeals) had granted four opportunities for compliance on July 22, 2024, June 2, 2025, June 26, 2025 and August 18, 2025. The taxpayer sought adjournments on two occasions and did not comply on the remaining dates.

The bench further observed that the email address to which the final notice was sent was available in the Income Tax Department's database and had been provided by the taxpayer himself. It also noted that apart from seeking adjournments on two occasions, no compliance had been made before the appellate authority.

The Tribunal further observed that no compliance had been made before the Assessing Officer and no material had been brought on record to explain the credits appearing in the bank accounts.

"We, therefore, deem it proper to impose a cost of Rs.10,000/- on the assesse which should be paid to Prime Minister National Relief Fund within a period of 15 days from the date of receipt of this order," the bench held.

At the same time, the Tribunal observed that the Assessing Officer's action in treating the entire credit entries in the bank account as income of the taxpayer could not be held to be correct.

"At the same time, the action of the AO in treating the entire credit entries in the bank account as income of the assessee also cannot be held as correct," the bench observed.

The tribunal therefore set aside the matter to the file of the Commissioner of Income Tax (Appeals) and directed that another opportunity be granted to the taxpayer to explain the source of the credit entries in the bank account.

It further directed the taxpayer to bring evidence on record explaining the nature of the credit entries and comply with the directions of the appellate authority.

The tribunal observed that the Commissioner of Income Tax (Appeals) may, if found necessary, call for a remand report from the Assessing Officer before adjudicating the appeal in accordance with law.

The appeal was allowed for statistical purposes.

For Appellant: Shri Divyang Shah, AR

For Respondent: Shri Rameshwar P Meena, SR-DR