EFFECT OF SENDING ANY SERVICE OF COMMUNICATION USING SECONDARY MAIL OF THE ASSESSEE

[Mr. M. GOVINDARAJAN]

Service of notice

Section 282 of the Income Tax Act, 1961 (‘Act’ for short) provides the procedure for sending notice to the assessee by the Income Tax Authorities.  The said section provides that the service of a notice or summon or requisition or order or any other communication under this Act may be made by delivering or transmitting a copy thereof, to the person therein named,-

• by post or by such courier services as may be approved by the Board; or
• in such manner as provided under the Code of Civil Procedure, 1908 for the purposes of service of summons; or
• in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000;
• by any other means of transmission of documents as provided by rules made by the Board in this behalf.

The Board may make rules providing for the addresses (including the address for electronic mail or electronic mail message) to which the communication may be delivered or transmitted to the person therein named.

Electronic transmission

The Board vide Income-tax (18th Amendment) Rules, 2015 has notified rule 127 for Service of notice, summons, requisition, order and other communication on 2nd December 2015.  Rule 127(2)(b) provides that for communications delivered or transmitted electronically-

• email address available in the income-tax return furnished by the addressee to which the communication relates; or
• the email address available in the last income-tax return furnished by the addressee; or
• in the case of addressee being a company, email address of the company as available on the website of Ministry of Corporate Affairs; or
•  any email address made available by the addressee to the income-tax authority or any person authorized by such income-tax authority.

The Principal Director General of Income tax (Systems) specifies the procedure, formats and standards for ensuring secured transmission of electronic communication which is as detailed below-

1. The email address of the assessee to be used for the purpose of electronic communication shall be as specified in  rule 127(2)(b) of Income tax rules 1962.
2. The assessee may furnish a letter to the Assessing Officer  providing any other email address as specified in  rule 127(2)(b) of Income tax rules 1962.  The email address so provided shall be the primary email address for the purpose of issuing electronic communication under this notification once such letter is received by the Assessing Officer. Otherwise, the existing email as per (a) above would be the primary email.
3. The email address to be used by the Assessing Officer  for the purpose of electronic communication under this notification shall be his official designation based email address under the domain @incometax.gov.in.
4. The Assessing Officer  shall issue all statutory notices/questionnaires including notice under section 143(2) and notice under section 142 (1) of the  Act  from his designation email address to the assessee's email address.
5. For the purpose of electronic communication, the Assessing Officer shall attach the scanned copy of the notice under section 143(2) or 142(1) bearing his/her signature in PDF format to the email being sent to the assessee.
6. In response to the notice, assessee shall, using his primary email address, submit the details called for, to the designation email address of the Assessing Officer-

• All supporting documents shall be submitted as attachment in Portable Document Format (PDF) to the email being sent to the Assessing Officer.
•  In case the total size of the attachments exceed 10 MB then the assessee shall split the attachment and send in as many emails as may be required to adhere to the limit of attachment size of 10 MB per email. However, in each such attachment, assessee shall specifically clarify the corresponding Notice Number and date in the footer to which the attachment relates and number the pages in continuation for all attachments to ensure proper linkage.
• Any email, in response to the notice issued by the Assessing Officer, received from the primary email address of the assessee shall be considered as a valid response to the notice.

7. In case of non-delivery of email on the primary email address, the notices shall be sent to other email addresses of the assessee available with the department as mentioned in  rule 127 (2).
8. In a case where a notice is not sent by email due to any reason including technical reasons such as email failure or mailbox full etc., but sent by other valid mode of service as prescribed in the Act, the same shall constitute valid service. The Assessing Officer shall record reasons in writing for not serving notice by email.
1.   In a case where a reply by taxpayer is not sent by email due to technical reasons such as email failure or mailbox full etc., but sent or delivered physically to the Assessing Officer, the same shall be treated as adequate compliance.
10. The Assessing Officer  shall pass the order and attach the scanned copy of the order under section 143(3) bearing his/her signature in PDF format to the email sent to the assessee and/or cause the order under section 143(3) to be served as specified in section 282 of the Act.  The Assessing Officer shall place a hard copy of all emails and supposing documents on the relevant assessment file for record purposes.

Electronic transmission using E-proceedings

Notification no. 4/207 [DGIT(S)/DIT(S)-3/AST/PAPERLESS ASSESSMENT PROCEEDINGS/96/2015-16, dated 3-4-2017 provides the procedure, formats and standards for ensuring secured transmission of electronic communication using E Proceeding is specified as under:

• All the notices/questionnaire/letter/Orders issued from ITBA modules by any Income-tax Authority will be visible to Assessee after login under ‘E-Proceeding’ Tab in the E-filing website of the Department in https://incometaxindiaefiling.gov.in, and may also be sent by the designated email address (e-mail address based on the designation of the income tax authority under the domain@incometax.gov.in) to the registered e-email address of the Assessee.
• A text message alerting the Assessee may also be sent on the mobile number registered on the E-filing website.

Issue

The issue to be discussed in this article is as to whether the communication by the Assessing Officer to the assessee to his secondary email is valid.  In LOK DEVELOPERS VERSUS DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 24 (1) , MUMBAI, THE NATIONAL FACELESS ASSESSMENT CENTRE, UNION OF INDIA - 2023 (2) TMI 757 - BOMBAY HIGH COURT,  the High Court quashed the communication by Assessing Officer through the secondary email id of the assessee and the follow up orders passed by the Assessing Officer. 

In the above said case the petitioner is a registered partnership firm doing business on real estate development.  The Income Tax Authorities issued a show cause notice under section 148 of the Act for reassessment for the AY 2015-16, 2016-17 and 2017-18 for proposed variation in the draft assessment order dated 25th March 2022 and assessment order u/s 144B read with (r.w) s.144, notice of demand u/s 156. The petitioner further apprehends passing of a Penalty Notice u/s 271(1)(c) of the Act.   Therefore the petitioner filed the present 3 writ petitions before the High Court challenging the same. 

The petitioner submitted before the High Court the following-

• the impugned notice was issued on the secondary email id as per PAN card i.e. on LOKTAX2008@ REDIFFMAIL.COM and not on the registered primary email id i.e. loktax201415@rediffmail.com.
• The respondents ought not to have issued Notice u/s. 148 on the email-id mentioned in the Return of Income for AY 2013- 14 but on the last Return of Income filed by the petitioner.
• The last Return of Income filed by the petitioner was for AY 2020 - 21 were on 7th January 2021 and the email id mentioned thereon was loktax2016@rediffmail.com.
• The notice under section 148 dated 28th March 2022 was in contravention of section 282 and 282A of the Act read with  Rules 127 and 127A of the Income Tax Rules, 1962 read with notifications issued by the CBDT and consequently not in accordance with law.
• The respondent had not proved service on the petitioner which is a mandatory requirement and consequently the subsequent proceedings would be null and void.
• The petitioner had refused to participate in proceedings that were ab initio null and void for want of valid service of notice.

The Department submitted the following before the High Court-

• The notice under section 148 was issued in accordance with law.
• The petitioner had not denied the email id and that it was registered with the PAN database.
• The assessee had not filed its return of income for AY 2008-09, 2015-16 to 2018-19 and therefore the notice was issued on the email address mentioned in the return filed for AY 2013-14.
• The Department could not be held responsible for an inactive email id or the petitioner not updating the email id registered with PAN.

The Department, therefore, prayed the High Court to dismiss the writ petition.

The High Court heard both the parties and also perused the papers in the proceedings.  The High Court framed the question to answer in this case is as to whether subsequent proceedings initiated by the revenue authorities for non-compliance of notice u/s 148 under the Income Tax Act would be vitiated on account of notice u/s 148 of the Act being served on the secondary email id registered with PAN instead of the registered primary email id or updated email id filed with the last Return of Income.

The High Court observed that on 7th January 2021 the petitioner had filed its Return of Income for AY 2020 -21 and the email id mentioned therein was loktax2016@rediffmail.com therefore the Assessing Officer ought to have considered this email as provided u/r 127 (1) (b) (i) email address available in the income tax return furnished by the addressee to which the communication relates which would be the primary email id or i.e. email address available in the last income tax return furnished by the addressee. The High Court held that the Assessing Officer clearly erred in issuing a notice on the secondary email address when there was a primary email address given by the petitioner.  A secondary email address has to be used as an alternative or in such circumstances when the authority is unable to effect service of any communication on the primary address.  There is no prudence in issuing an email on the secondary email address.

The High Court further observed that the Assessing Officer to have checked if there was a change of address before initiating a proceeding; and that a valid service of notice under section 148 is a condition precedent lest it would be a jurisdictional error.  The High Court quashed and set aside the notice dated 28.03.2022, and all consequential proceedings including the show cause notice for proposed variation dated 25.03.2022 and assessment order under section 144B read with section 144.