The Income Tax Appellate Tribunal (ITAT) Raipur Bench has delivered a significant ruling that upholds taxpayer rights and the principles of natural justice. In a case involving Ram Bishal Sharma, the Tribunal overturned an ex-parte dismissal of an appeal by the Commissioner of Income Tax (Appeals) [CIT(A)] because the notice was served via email, even though the assessee had explicitly opted out of email communication in Form 35.

This ruling reinforces that taxpayer choices in procedural forms must be respected, and any communication method outside those preferences may invalidate proceedings.

Background of the Case

Assessee: Ram Bishal Sharma
Assessment Year: 2011–12
CIT(A) Order Date: 26th March 2025
Matter: Ex-parte dismissal due to alleged non-compliance with notices

The issue arose when CIT(A) dismissed Sharma’s appeal for non-appearance during the hearing. The notices for the hearing were sent via email and through the e-filing portal. However, the assessee had selected “No” for email communications while filing Form 35, which clearly meant he did not consent to receiving notices via email.

Despite this, the department continued to issue notices electronically and took no additional steps to ensure valid service by other permitted methods like postal communication.

Arguments and Observations

✅ Assessee’s Stand

Sharma’s legal representative strongly argued that:

  • Email notices were not valid, as the assessee had opted out.

  • No other effort (physical delivery or portal alert) was made to ensure actual communication.

  • The ex-parte dismissal violated principles of natural justice as the assessee was unaware of the hearing dates.

🚫 Revenue’s Counter

The Revenue argued:

  • Notices were dispatched via registered email and were deemed served.

  • The non-response implied that the assessee was not interested in pursuing the appeal.

ITAT’s Analysis and Verdict

The single-member bench led by Partha Sarathi Chaudhury (Judicial Member) ruled in favor of the assessee, making the following key points:

  1. Form 35 Selection is Binding
    The assessee’s choice in Form 35 to not receive email notices is legally valid. This is a privilege provided by the Income Tax Department, and ignoring it is not acceptable.

  2. No Real Communication Was Established
    The Tribunal noted that there was no evidence of any alternate valid communication, such as postal delivery or acknowledgment from the assessee.

  3. Violation of Natural Justice
    Quoting Supreme Court judgments, the bench reminded that the right to be heard is a fundamental right under Article 14 of the Constitution. Ignoring service rules goes against this.

  4. Cited Precedents

    • Brajesh Singh Bhadoria vs. Dy./ACIT (ITAT Raipur)

    • Delhi Transport Corporation vs. DTC Mazdoor Union (SC)

    • CIT v. Chenniyappa Mudiliar (SC)

Final Judgment by ITAT

  • The CIT(A)’s ex-parte dismissal order was set aside.

  • The matter was remanded back for de novo (fresh) adjudication.

  • CIT(A) was instructed to:

    • Serve notices in accordance with the assessee’s Form 35 preference

    • Provide the assessee a reasonable opportunity to present the case

Important Note: The Tribunal warned the assessee to cooperate fully, calling this his final opportunity to comply with hearing proceedings.

Frequently Asked Questions (FAQs)

Q1. What is Form 35 used for in income tax?
It is the form used to file an appeal before the Commissioner of Income Tax (Appeals) under Section 246A.

Q2. Can I choose not to receive income tax notices by email?
Yes. While filing Form 35, taxpayers can select “No” to receiving notices via email. This must be honored by the department.

Q3. What is an ex-parte dismissal?
It refers to the disposal of a case without hearing one party, usually due to non-appearance or lack of response.

Q4. Why did ITAT remand the case?
Because valid service of notice was not established, violating the taxpayer’s right to be heard.

Q5. Will the assessee get another chance?
Yes. But the ITAT has clearly said that this is the final opportunity, and further non-compliance won’t be excused.

Conclusion

This judgment is a reminder to the Income Tax Department and all authorities that due process cannot be skipped, even in the digital age. Taxpayers are entitled to be served notices in a manner they have consented to. Ignoring such preferences not only defeats the spirit of fairness but also invites legal reversal.

The ITAT ruling ensures that taxpayer rights and procedural integrity go hand in hand. For assessees, it’s also a lesson to fill forms mindfully and respond promptly when genuine notices are received.