Contact notificaitons not being sent out!

Anyone able to help with this? I have everything setup with email and such. We are using Zoho Support (well testing it out) when a Contact(Customer) emails in, no acknowledgement emails are sent to the contact to let them know we have received their case. All the options are active and turned on. I have tested from 4 different domains and its the same issue with each of them. The crazy part is, if the agent responds to the case the contact gets notified and can respond but still no notifications (Guess Automatic Notifications) are ever sent to the client...

Anyone have any suggestions on where to correct this, or what the problem might be?

Thanks in advance.