Assessees Not Expected To Keep Open Dept's E-Portal Of All The Time To Track Actions Of Dept.: Punjab & Haryana High Court

The Punjab and Haryana High Court has held that the assessee is not expected to keep the e-portal of the department open all the time so as to have knowledge of what the department is supposed to be doing.

The bench of Justice Sanjeev Prakash Sharma and Justice Sudeepti Sharma has observed that before any action is taken, a communication of the notice must be in terms of the provisions as enumerated hereinabove.The provisions do not mention communication being “presumed” by placing notice on the e-portal. A pragmatic view has to always be adopted in these circumstances. An individual or a company is not expected to keep the e-portal of the department open all the time so as to have knowledge of what the department is supposed to be doing with regard to the submission of forms, etc. The principles of natural justice are inherent in the income tax provisions, and the same are required to be necessarily followed.

A show cause notice was issued to the petitioner/assessee for initiating proceedings under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, by the Commissioner of Income Tax Exemptions, Chandigarh, but the notice was not sent on the petitioner's email or otherwise and was only reflected on the e-portal of the Department.

The two reminders in respect to the show cause notice were also published on the e-portal of the department. However, it is an admitted position that the notice and reminders were not served upon the petitioner, as there is no email sent by them.

The department in the reply has submitted that communication of the notice electronically would also include communication of the notice by placing it on the e-portal.

The department contended that as the petitioner had submitted his form himself on the e-portal, a presumption can be drawn that he had knowledge of the notices and reminders that were placed on the e-portal, as there was no requirement of submitting notice personally through e-mail or otherwise.

The court noted that the provisions of Section 282(1) of the Act of 1961 and Rule 127(1) of the Income Tax Rules, 1962 provide for a method and manner of service of notice and orders.

The court held that the petitioner has not been given sufficient opportunity to put up his pleas with regard to the proceedings under Section 12A(1)(ac)(iii) of the Act of 1961 and that he was not served with any notice. Therefore, he would be entitled to file his reply, and the department would, of course, be entitled to examine the same and pass a fresh order thereafter.

The court, while allowing the petition, stated that the Department would provide an opportunity of hearing to the petitioner, and they would also allow the petitioner to appear personally for the purpose of passing a speaking order independent of the order passed earlier by them on January 16, 2023.

Counsel For Petitioner: Alok Mittal

Counsel For Respondent: Amanpreet (AP) Singh

2024 LiveLaw (PH) 106

Case Title: Munjal BCU Centre Of Innovation And Entrepreneurship, Ludhiana Versus Commissioner Of Income Tax Exemptions, Chandigarh

Case No.: CWP-21028-2023 (O&M)

Click Here To Read The Order