ITAT Hyderabad: Service of Notice on Unspecified Email IDs Invalidates Ex-Parte Dismissal
In the evolving landscape of the Faceless Appeal Scheme, the precise mode of communication between the tax department and the assessee has become a subject of significant legal scrutiny. A recent judicial pronouncement by the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, in the case of Veenus Jewellars Vs ITO, has reinforced the principle that appellate authorities are strictly bound to communicate via the specific contact details furnished by the assessee. The Tribunal held that sending notices to email addresses not specified in Form No. 35 constitutes improper service, thereby warranting the condonation of delay and the restoration of appeals dismissed for non-prosecution.
Introduction to the Dispute
The transition to digital tax administration in India was intended to streamline compliance and reduce physical interface. However, this shift has occasionally resulted in communication gaps where automated notices are triggered to email addresses registered on the e-filing portal but not actively monitored or authorized by the assessee for specific proceedings.
The core of the dispute in Veenus Jewellars Vs ITO revolved around the validity of an appellate order passed ex-parte by the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC). The assessee challenged the order primarily on the grounds of violation of natural justice, citing that they never received the hearing notices due to the department's failure to use the authorized email ID.
Factual Matrix of the Case
The case pertains to the Assessment Year 2017-18. The assessee, a firm named M/s. Veenus Jewellars, had originally faced an assessment order passed under Section 144 of the Income Tax Act 1961. This section empowers the Assessing Officer (AO) to pass a "Best Judgment Assessment" when an assessee fails to comply with statutory notices or fails to produce required accounts.
Aggrieved by the additions made in the assessment order, the assessee filed an appeal before the CIT(A). However, the CIT(A) eventually dismissed the appeal for non-prosecution on 31.12.2024.
The Delay in Filing Appeal Before ITAT
Following the dismissal by the CIT(A), the assessee approached the Tribunal. However, the appeal before the ITAT was filed on 28.08.2025, resulting in a significant delay of 181 days.
To proceed with the appeal on merits, the assessee first had to surmount the hurdle of limitation. A petition for condonation of delay was filed, supported by an affidavit detailing the reasons for the late filing. The primary defense raised by the assessee was a lack of knowledge regarding the CIT(A)'s order due to non-service of the order on the designated communication channel.