Confusion In Relation To The Service Of Intimation Through Email: ITAT Condones Delay Of 9 Years

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) ruled that there was significant ambiguity regarding the service of notice under Section 143(1) to the assessee via email.

The two-member bench of Anikesh Banerjee (Judicial Member) and Dr. M. L. Meena (Accountant Member) has observed that there has been a delay of 9 years, which is a huge delay for adjudicating the appeal by the CIT(A). However, the assessee also provided a "reasonable cause" for the delay in filing the appeal.

The assessee or appellant has filed the return for A.Y. 2010–2011. The return was processed, and the deduction was rejected, which had been claimed by the assessee regularly since A.Y. 2002-03. The total demand was raised.

According to the assessee, no notification was received from the department. So the assessee was unable to take action against the demand. Finally, after a nine-year delay, the assessee filed an appeal with the CIT (A) on January 30, 2020. The assessee submitted an affidavit against the nine-year delay. But the delay was not condoned by the CIT (A). The appeal of the assessee was dismissed on the basis of the delay in filing the appeal.

The assessee claimed that the delay was caused by his failure to receive a notification. It may have been sent to the assessee’s email, which was duly maintained by the accountant, and the accountant had not informed the assessee. Without proper opportunity, the deduction under Section 80IB was rejected in the processing of the return under Section 143(1).

The ITAT found that the assessee had a sufficient reason for not submitting the appeal within due time. The merit was also not considered in the appeal stage, as it is decided inlimine. As a result, the case was remanded to the CIT(A), who was directed to issue a new order on the merits.

Case Title: M.K. Hotels & Resorts Ltd. Versus Assistant Commissioner of Income Tax

Citation: I.T.A. No.57/Asr/2021

Date: 01.03.2023

Counsel For Appellant: CA Ashwani Kalia

Counsel For Respondent: Ravinder Mittal

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