Rule 127(1) Income Tax Rules| Communication Cannot Be “Presumed” By Placing Notice On Income Tax E-Portal: Punjab & Haryana HC
The Punjab and Haryana Court held that communication, as outlined in Rule 127(1) of the Income Tax Rules, 1962, cannot be presumed simply by placing a notice on the e-portal.
The Court pointed out that an individual or a Company cannot be expected to keep the e-portal of the Income Tax Department (Department) open all the time to know what the Department is supposed to be doing regarding the submissions of forms, etc.
A Division Bench of Justice Sanjeev Prakash Sharma and Justice Sudeepti Sharma observed, “It is essential 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 of communication to be “presumed” by placing notice on the e-portal. A pragmatic view has to be adopted always in these circumstances.”
Advocate Alok Mittal represented the petitioner, while Sr. Standing Counsel Amanpreet (AP) Singh appeared for the respondent.
An application under Article 226 of the Constitution was filed by the petitioner who sought to stay the operation of a Show Cause Notice (notice) issued by the Department.
The petitioner submitted that notice had not been personally served on the petitioner. Instead, it was only reflected on the e-portal of the Department. Despite two reminders also being published on the e-portal, the petitioner had not been formally served with the notice or reminders via email or otherwise.
The Department contended that placing the notice on the e-portal constituted communication, and as the petitioner had submitted forms on the same portal, it could be presumed that they were aware of the notice and reminders.
However, the Court disagreed with the stance of the Department and perused provisions regarding the service of notices under Section 282(1) of the Income Tax Act, 1961, and Rule 127(1) of the Income Tax Rules, 1962.
The Court held that the petitioner was not given a sufficient opportunity to put up pleas with regard to the proceedings under Section 12A(1)(ac)(iii) of the Act as he was not served with any notice. The Department was directed to provide an opportunity for a hearing to the petitioner and to allow them to file a reply.
Accordingly, the High Court allowed the petition.
Cause Title: Munjal BCU Centre of Innovation and Entrepreneurship v. Commissioner of Income Tax Exemptions (Neutral Citation: 2024:PHHC:030865-DB)
Appearance:
Petitioner: Advocate Alok Mittal
Respondent: Sr. Standing Counsel Amanpreet (AP) Singh
