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TMI Blog2022 (9) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... (for stay) W.P.(C) 1057/2022 & CM APPL.3029/2022 (for stay) W.P.(C) 1094/2022 & CM APPL.3117/2022 (for stay) W.P.(C) 1274/2022 & CM APPL.3729/2022 (for stay) W.P.(C) 1380/2022 & CM APPL.4001/2022 (for stay) W.P.(C) 1381/2022 & CM APPL.4003/2022 (for stay) W.P.(C) 1624/2022 & CM APPL.4727/2022 (for stay) W.P.(C) 1650/2022 & CM APPL.4777/2022 (for stay) W.P.(C) 1756/2022 & CM APPL.5066/2022 (for stay) W.P.(C) 1759/2022 W.P.(C) 1761/2022 & CM APPL.5073/2022 (for stay) W.P.(C) 1937/2022 & CM APPL.5566/2022 (for stay) W.P.(C) 2006/2022 & CM APPL.5758/2022 (for stay), CM APPL. 13914/2022 (condonation of delay) W.P.(C) 2007/2022 W.P.(C) 2012/2022 W.P.(C) 2016/2022 & CM APPL.5765/2022 (for stay) W.P.(C) 2087/2022 & CM APPL.5992/2022 (for stay) W.P.(C) 2137/2022 & CM APPL.6149/2022 (for interim relief), CM APPL. 13913/2022 (for condonation of delay) W.P.(C) 2238/2022 & CM APPL.6435/2022 (for exemption) W.P.(C) 2241/2022 & CM APPL.6440/2022 (for stay) W.P.(C) 2265/2022 & CM APPL.6519/2022 (for stay) W.P.(C) 2286/2022 & CM APPL.6573/2022 (for stay) W.P.(C) 2290/2022 & CM APPL.6582/2022 (for stay) W.P.(C) 2339/2022 W.P.(C) 2357/2022 & CM APPL.6789/2022 (for stay) & CM APPL. 19557/2022 (for sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Limited Swift Realtech Private Limited, Puneet Ghai, Gautam Chand Jain, M/s. Sagar Polychem Pvt. Ltd., M/s. Sagar Polychem Private Limited, Mr. Vijay Kumar Goel, Gagan Chadha, Secom Services India Pvt. Ltd. Evolve Brands Private Limited, T.S. And Sons HUF Ms. Manju Kumari Premsagar Prasad, Ankit Jain, Sanju Agarwal, P.K. Marketing Company, Sagari Leathers Pvt. Ltd., M/s. Sant Sandesh Media and Communication Pvt. Ltd., Concept Infradevelopers Pvt Ltd., Abhishek Aggarwal Stratagem Portfolio (P) Ltd., Bholenath Foods Limited, Umesh Kumar Gupta As Legal Heir Of Deceased Saroj Bala Gupta, Umesh Kumar Gupta, Sandeep Jain, Mansi Aggarwal, Rakesh Kumar Aggarwal Parag Gupta (Since Deceased), Through His Legal Representatives Sh. Prem Chand Gupta, Shanti Lal Porwal, Indra Porwal, Davinder Bajaj, Uma Goel, Sahil Home Loomtex Private Limited, Versus Assistant Commissioner Of Income Tax, Circle 22-2, Delhi & Anr. DCIT Circle 13(1) Delhi And Anr., Pr. Commissioner Of Income Tax & Anr., Assistant Commissioner Of Income Tax Circle 43(1) Delhi And Ors. & Anr. Office Of The Income Tax Officer, Union Of India & Ors Petitioner Through Mr. Satyen Sethi with Mr. Arta Trana Panda, Advocates. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr. Standing Counsel with Ms.Zehra Khan, Jr. Standing Counsel and Mr. Shray Nargotra, Advocate. Ms. Vibhooti Malhotra, Sr. SC with Mr. Shaliender Singh, Jr. SC, Mr. Udit Sharma, Adv. Mr. Avnish Singh, SCGC for R-2/UOI with Mr. Saurav Sharma and Mr. Rahul Ranjan, Advocates. Mr. Jitesh Vikram Srivastava SPC with Mr. Prajesh Vikram Srivastava, Advocate for UOI. Mr.Vikrant N.Goyal, Advocate with Mr.Shikhar Sardana, Advocate. Mr.Nawal Kishore Jha Adv SPC with Ms.Kalpana Jha, Adv. for R-2. Ms.Saroj Bidawat, Sr. Panel Counsel for UOI. Mr. Prakash Kumar, Central Govt. Senior Counsel for R-2. Ms. Archana Gaur, Advocate for UOI. Mr. Virender Pratap Singh Charak, and Ms.Shubhra Parashar, Advs. for UOI. Mr. Sunil Agarwal, Sr. Standing Counsel, Mr. Tushar Gupta, Jr. Standing Counsel Ms.Manisha Agrawal Narain, CGSC with Mr. Aditya Singh Deshwal Advocate for UOI. 53 J U D G M E N T MANMEET PRITAM SINGH ARORA, J: CM APPL. 13602/2022 in W.P. (C) No. 10/2022 (Condonation of delay) CM APPL. 13601/2022 in W.P.(C) No. 496/2022 (Condonation of delay) CM APPL. 13914/2022 in W.P.(C) No. 2006/2022(Condonation of delay) CM APPL. 13913/2022 in W.P.(C) No. 2137/2022 (Condonation of delay) For the reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st April, 2021, reassessment could only be reopened up to AY 2018-19 and all prior assessment years were barred. 1.6. For initiation of reassessment proceedings on 1st April, 2021, for any AY prior to AY 2018-19, the pre-conditions contained in the amended Section 149(1)(b) of the Act of 1961 were required to be fulfilled by the Income Tax Department ('Department'). 1.7. Further, before issuance of a notice under Section 148 of the Act of 1961 after 1st April, 2021, the Department had to comply with the mandatory procedure prescribed under the newly inserted Section 148A of the Act of 1961. 1.8. Since there was a regime change with respect to law of limitation coming into effect from 1st April, 2021, which curtailed the time limit for re-opening of assessment from 6 years to 3 years, the Department with a view to avail the limitation prescribed under the unamended Section 149 of the Act of 1961, generated reassessment Notices under Section 148 of the Act of 1961 for AYs 2013-14, 201415, 2015-16, 2016-17 and 2017-18, all dated 31st March, 2021 ('Notices'). 1.9. The impugned Notices were generated and sent for despatch through electronic mail ('e-mail') by the Jurisdictional As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st March, 2021 or before, manually signed, no service by e-mail but despatched through speed post on or after 1st April, 2021. ..." 1.14. Since the deadline for passing the assessment orders in most of these cases was 31st March, 2022, the proceedings pursuant to the impugned reassessment Notices were stayed till further orders by this Court vide the aforesaid order dated 24th March 2022. 2. Therefore, the controversy which has arisen for consideration is whether these impugned Notices were issued on or before 31st March, 2021 or thereafter. If this Court holds that the impugned Notices were validly issued under the unamended Section 149 of the Act of 1961 on or before 31st March 2021, then, the re-assessment proceedings would be governed by the unamended provisions of Section 147, 148, 149 and 151 of the Act of 1961 as they stood before 1st April, 2021. However, if this Court concludes that the impugned Notices were issued on or after 01st April, 2021, then, the new regime of Section 147, 148, 148A, 149 and 151 of the Act of 1961, shall govern these reassessment proceedings and the decision of the Supreme Court in Union of India v. Ashish Agarwal, 2022 SCC OnLine SC 543, would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in an uneditable PDF format (i.e., as a PDF file). The JAO thereafter has up to 15 days to affix his/her Digital Signature Certificate ('DSC') on the Notice so generated. 7.4. Upon affixation of the DSC by the JAO, the ITBA software's email system will automatically trigger an e-mail to the assessee with the DSC appended Notice enclosed as an attachment to the e-mail. The ITBA software system will also share the DSC appended Notice with the assessee's E-filing portal's software database (which is a separate portal developed by the Department for the assessee). 7.5. In the event the JAO omits to affix his/her DSC to the Notice within 15 days from the date of its generation, the said Notice (without DSC) will be automatically triggered by the ITBA software system through e-mail and it will also be shared on the E-filing portal's database. 7.6. In case the JAO opts for option (b) i.e., to generate the Notice without DSC, the Notice is generated in an un-editable PDF format on the ITBA portal. Upon generation itself, the ITBA software's e-mail system is triggered and an e-mail containing the said Notice (without DSC) is sent to the e-mail address of the assessee and also uploaded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by the JAO, a unique Document Identification Number ('DIN') is assigned by the ITBA to the said Notice and once a DIN has been assigned, the JAO loses complete control over the Notice so generated by him/her i.e., the JAO can neither amend, alter nor cancel the said Notice. The JAO loses "locus poenitentiae" i.e. opportunity to withdraw the Notice once this DIN has been assigned. Therefore, upon generation of a DIN on the ITBA portal, the Notice should be considered as 'issued' and the despatch of the notice through e-mail or any other mode should not be a prerequisite for determining whether the Notice has been issued to the assessee. [The Collector of Central Excise, Madras v. M.M. Rubber & Co. Tamil Nadu, [1992 Supp (1) SCC 471] 9.2. In terms of Section 13 of the Information Technology Act, 2000 ('Act of 2000'), the JAO is the "originator" and the ITBA portal is the "computer resource" which is outside the control of the originator. As per Section 13 of the Act of 2000, despatch occurs when, the notice generated by the JAO (originator) enters the ITBA system (computer resource) which is outside his/her control. Therefore, once the Notice is generated by the JAO the time take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be considered authenticated. Further, as per Rule 127A of the Income Tax Rules, 1962 ('IT Rules'), every communication in electronic form by an Income Tax Officer shall be deemed to be authenticated if the name and office of the officer are mentioned in the e-mail body or printed on the attachment to the e-mail. Therefore, there is no mandatory requirement of affixing DSC and the Notices falling under category 'B', which have been issued without the affixation of DSC are also valid. 9.9. The Court should adopt a purposive interpretation to the machinery provisions to give effect to the legislative intent to tax rather than destroy the same. [CIT v. Calcutta Knitwears, 2014 (6) SCC 444]. 10. Mr. Puneet Rai, learned Senior Standing counsel for the Department submitted as follows: 10.1. The date of issue of the impugned Notices is a disputed question of fact in the instant petitions and since the same have been filed at the stage of 'Notice for reopening of assessment', the Court should not be inclined to examine these factual aspects. [Rajesh Sunderdas Vaswani v. Deputy Commissioner of Income Tax,(2017) 88 taxmann.com 602 (Gujarat) at para 9 and 13]. 10.2. The service of Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame & office of the Income Tax Officer was duly printed thereon. Further, the e-mail appending the Notice was triggered within 15 days as the JAO had selected option (a) on the ITBA Screen but omitted to affix his/her signature within 15 days, thus, causing delay in despatch of e-mail. In these facts, the Department contends that the Notices were issued on 31st March, 2021. It is not disputed by the Department that the Notices were despatched on or after 01st April, 2021, but the said fact as per the Department is not determinative of the expression 'shall be issued' in Section 149 of the Act of 1961. 12.3. Category 'C': The Notice with a DIN was generated on 31st March, 2021, and the DSC was affixed by the JAO on the same date; nothing further could have been done by the JAO as the said notice was outside his control. The delay in triggering of the e-mail by the ITBA software system was because of the high volume of Notices generated on 31st March, 2021. The e-mails containing the impugned Notices were despatched on 01st April, 2021, or thereafter, to the assessee, however that is not determinative of the expression 'shall be issued' in Section 149 of the Act of 1961. 12.4. Cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty issuing the same, to conclude that it has been issued. [Kanubhai M. Patel (HUF) v. Hiren Bhatt, (2011) 334 ITR 25 (Guj)] 16.3. The provisions of Section 149 of the Act of 1961, does not contain the expression 'Assessing Officer'. Therefore, no distinction can be made between the 'Assessing Officer' and 'ITBA portal' under Section 149 of the Act of 1961. The time taken by the ITBA software for triggering of e-mail is attributable to AO and since admittedly the impugned Notices were despatched on 01st April, 2021, or thereafter, the same are time barred. 16.4. The E-verification Scheme, 2021 issued by CBDT vide Notification bearing No. 137/2021 dated 13th December, 2021 in paras 6, 9 and 11, states that affixation of DSC in E-proceedings is a mandatory requirement. In the absence of DSC, the impugned Notices would be null and void. 16.5. The circular bearing No. 19/2019 dated 14th August, 2019, issued by CBDT mentions that the allotment of a DIN to the Notice is a mandatory requirement prescribed by the aforesaid circular only to maintain the audit trail of the documents issued by the Department and to provide transparency in the process. The allotment of DIN to the notice does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , wherein the Supreme Court has held that a notification would be in effect from the time and date on which it was uploaded on the e-gazette and not the date mentioned in the notification. 17. The learned counsel for the petitioner, Mr. Ved Jain, submitted as under: 17.1. The details of the date and time of despatch of the impugned Notices by the ITBA servers are available with the Respondent. In the case of Santosh Krishna HUF v. UOI, bearing Writ Tax No. 211 of 2022 and Mohan Lal Santwani Vs. UOI, bearing Writ Tax No. 569 of 2022, the Department provided the Allahabad High Court with the details of: (1) generation of notice; (2) digital signing by JAO, and (3) triggering of e-mail to the assessee. Further, the Allahabad High Court in Mohan Lal Santwani (Supra) has directed that the date and time of triggering e-mail should be reflected in the E-filing portal accessed by assessee. Therefore, in the present cases, the aforesaid information, even though available is being withheld by the respondents. 17.2. In the writ petitions, wherein the e-mail was triggered by ITBA servers before 31st March, 2021, the respondents have readily furnished the said information in their co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per Section 148 of the Act of 1961, valid issuance of Notice is a jurisdictional requirement not just a mere procedural requirement. There is a heavy onus on the Department to provide the date on which impugned Notices have been posted or the date and time on which the e-mail was sent from the e-mail ID of the JAO. [CIT v. Chetan Gupta, (2016) 382 ITR 613] 18.2. All impugned Notices sent by e-mail have been issued from the designated e-mail address of the JAOs, therefore, to allege that the triggering of e-mail by the ITBA is separate from the JAO is factually incorrect. The process of triggering e-mail by the ITBA software system is for and on behalf of the JAO and therefore attributable to the JAO. 18.3. The issue of Notice is only effective when the Notice has moved out of the control of the AO for delivery to assessee. Hence, the date on which the e-mail has been transmitted from the e-mail ID of the JAO would be the date of issuance of Notice under Section 149 of the Act of 1961. [Yuvraj v. Income Tax Officer & Ors. in W.P.(C) No. 28293 of 2021 order dated 3rd March 2022 (MP), and Kanubhai M. Patel (Supra)] 18.4. It is only upon despatch of the e-mail from ITBA servers th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a Notice or any other document to be issued by the income tax authority, such a Notice or document has to be signed and either 'issued' in paper form or 'communicated' in electronic form. The expression 'communicated' is also mentioned in Sections 158AB (5), 253(3) and 264 (3) of the Act of 1961. 20.2. While referring to correspondence in the digitized world, the word 'issued' has been replaced with the word 'communicated' in Section 282A of the Act of 1961. Therefore, when a Notice is in paper form, it has to leave the office of the concerned Authority for despatch to constitute a valid issuance. However, in digital form, the communication is instant and therefore, merely putting the notice into transmission cannot be deemed to be communication. To constitute a valid communication the Notice has to be effectively sent out by the concerned authority to the assessee. 20.3. The Section 282A of the Act of 1961, stipulates communication of the Notice as a sine qua non for due issuance of a Notice. Hence, the submission that generation of notice on the ITBA screen satisfies the condition of issued under Section 149 is contrary to the mandate of Section 282A of the Act of 1961. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e screenshot is reproduced herein below: "... Register Details Despatch No Date of issue PAN/ TAN Addressee Name Subject Comm. Ref. No. View Documents Mode of Despatch Date of Despatch Date of Service Status 31.03.2021 AHIPG3000F ANAND GOEL Notice u/s 148 ITBA/ AST/S /148 /2020 -1/103211 / 6278 (1) Attachments Email Email Delivered ..." Sent Email (?) Email Delivery Status Email Sent On Email Delivered On Shared with e -Proceeding on Email Details Delivered 01/04/2021 05:29:41 AM 01/04/2021 05:29:45 AM 03/04/2021 04:01:39 AM ....." 21.5. Therefore, the time when the e-mail containing the impugned Notice as an attachment was sent by the ITBA servers, is duly available with the Department in its ITBA portal. 22. The learned counsel for the petitioner Mr. Pawan Shree Agarwal, submitted as under: 22.1. The impugned Notice in this petition is distinct from Categories 'A' to 'E' identified in the order dated 24th March, 2022. The impugned Notice was never served to the petitioner on his registered e-mail ID. Instead, it was sent to an unrelated e-mail address. The petitioner learnt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n facts, that the e-mails attaching the impugned Notices dated 31st March, 2021, were despatched by the ITBA servers on 01st April, 2021, or thereafter. 25.2. Faced with the aforesaid factual position, it has been contended by the Department that since generation of impugned Notices on the ITBA portal on 31st March, 2021, is undisputed, the singular act of generation of Notice by JAO satisfies the requirement of 'issued' for the purpose of Section 149 of the Act of 1961 and despatch of the Notice on 31st March, 2021 is not a mandatory requirement. 25.3. The Department contends that since each of the impugned Notices bear a DIN, its generation as on 31st March, 2021, is beyond doubt. It is further contended that since, on the ITBA portal, after generation of Notice the JAO is left with no power to amend, alter, cancel or ante-date the Notice, the said act of generation conclusively establishes that the Notice has been issued. 25.4. The petitioners as noted above have opposed this contention of the Department as being contrary to settled law interpreting the expression 'issued', 'shall be issued' and the dictionary meaning of the phrase 'issue'. It is contended that under the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Supra). In the said case, the Supreme Court was concerned with the controversy of the validity of a notice with reference to Sections 148 and 149 of the Act of 1961. In the said case, the notice under Section 148 of the Act of 1961, was despatched by registered post on 31st March, 1970, but the same was received by the assessee on 03rd April, 1970; and therefore, the Gujarat High Court after observing that the expression 'issued' and 'served' in Section 148 and 149 have the same meaning, held that the notice was time barred. In appeal, the Supreme Court after taking note that the Notice was despatched by registered post on 31st March, 1970, set aside the judgment of the High Court. The Supreme Court held that the service of notice is not a condition precedent for satisfying the condition of "issued". The date of despatch of the notice was taken into consideration by the Supreme Court as the relevant date for determining that the notice has been validly issued for the purpose of Section 149 of the Act of 1961. The date of notice is discernible from the judgment of High Court Shanabhai P. Patel Vs. R.K. Upadhyaya reported in 1973 SCC Online Guj 42 : (1974) 96 ITR141. 25.7. The con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year, are clearly barred by limitation and as such, cannot be sustained. ..." (Emphasis Supplied) The Gujarat High Court categorically held that it is on the date of despatch of the Section 148 notice that the same will be held to be issued for the purpose of Section 149 of the Act of 1961. 25.8. The Madras High Court in Smt. Parveen Amin Bhathara (Supra), after approving the dicta of Kanubhai Patel (Supra) and considering Section 282 of the Act of 1961 and Rule 127 of IT Rules, held as under: "... 8. In the present case, the respondent reopened the assessment of the appellant for the assessment year 2011-12, through notice dated 31.03.2018 under section 148 of the Act. Admittedly, the limitation period of six years for reopening the assessment, came to an end on 31.03.2018. The main plank of contention of the learned counsel for the appellant is that the notice under section 148 of the Act dated 31.03.2018 has been received by the appellant through e-mail only on 18.04.2018 i.e., after the expiry of six years from the end of the assessment year under consideration and hence, the same is clearly barred by limitation, whereas the Department contended that mere s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act of 2000, held that, since the impugned Notice therein though dated 31st March, 2021, was issued through e-mail on 06th April, 2021, the same was time barred and therefore liable to be quashed. The Court at paragraph 29 and 30 held as under: "... 29. Thus, considering the provisions of sections 282 and 282A of the Act, 1961 and the provisions of section 13 of the Act, 2000 and meaning of the word "issue" we find that firstly notice shall be signed by the assessing authority and then it has to be issued either in paper form or be communicated in electronic form by delivering or transmitting the copy thereof to the person therein named by modes provided in section 282 which includes transmitting in the form of electronic record. Section 13(1) of the Act, 2000 provides that unless otherwise agreed, the despatch of an electronic record occurs when it enters into computer resources outside the control of the originator. Thus, the point of time when a digitally signed notice in the form of electronic record is entered in computer resources outside the control of the originator i.e. the assessing authority that shall the date and time of issuance of notice under section 148 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of R.K. Upadhyaya (Supra) in which the Court was concerned with issuance of the Section 148 notice in paper form and concluded that, since the date of despatch was within prescribed period of limitation, the notice was validly issued for the purpose of Section 149 of the Act of 1961, and held that the date of service of notice was not relevant. In fact, the Department has relied upon the said judgment. The said judgment squarely applies to Notice classified as category 'E'. The amendments to the Act of 1961 including Section 282A was to enable the income tax authority to issue notice either in paper form or electronic form and were made to provide an adequate legal framework for paperless assessment. Similarly, setting up of the digital platform of ITBA portal and the E-filing portal is for facilitating assessment proceedings electronically. The said amendments or the use of ITBA portal by Department for issuing notice in no manner mitigates against or dispense with the legal requirement of the Department to ensure due despatch of the Section 148 notice to satisfy the test of Section 149 of the Act of 1961. The contention of the Department that upon generation of the Notice on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the petitioner that the notice is said to have been issued vide email at 6.42 pm, but was served on 1-4-2021 at 2 am and, therefore, the unamended provision of section 148 of the Act of 1961 would not be applicable to the case... ..." We do not find that this judgment takes the case of the Department any further as the Section 148 notice in the case was duly despatched on 31st March, 2021. 25.17. The Department has not cited any judgment which would support its contention that mere drawing up of Notice and signing it (pending despatch) amounts to issuance. The counsel for the respondent placed heavy reliance on the judgment of the Supreme Court in M.M. Rubber & Co. (Supra). In the said case as well, the apex Court was concerned with the issue of limitation while determining if the impugned order therein had been passed within time. However, the provision under consideration was Section 35-E (3) of the Central Excise and Salt Act, 1944 ("Act of 1944"), which reads as under: "... Sub-Section (3) of Section 35E of the Act which deals with the limitation for exercise of the powers under sub- sections (1) and (2) of the Act and which is the relevant provision for considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Notice has been irrevocably issued. The submission of the respondent is not borne out from the applicable circular regarding DIN issued by CBDT and is therefore a mere ipse dixit of the counsel. 25.20. As per Circular No. 19/2019 (F. No. 225/95/2019-ITA.II) dated 14th August, 2019 issued by the CBDT, the DIN was introduced to maintain a proper audit of trail of communications issued by income tax authority. The said circular does not state that the generation of DIN would automatically constitute issuance of the notice. Relevant extract from the aforementioned circular is reproduced as under: "... ...However, it has been brought to the notice of Central Board of Direct Taxes (the Board) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as "communication") were found to have been issued manually, without maintaining a proper audit trail of such communication. 2. In order to prevent such instances and to maintain proper audit trail of all communication, the Board in exercise of power under section 119 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), has decided that no commun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer question no. (I) in negative against the Department and hold that the impugned Notices dated 31st March, 2021, which were despatched on 1st April, 2021, or thereafter, would not meet the test of 'issued' under Section 149 of the Act of 1961 and would be time barred, unless saved by the judgment of the Supreme Court in Ashish Aggarwal (Supra). 25.24. With respect to impugned Notices falling in category 'A', there is an additional factor which evidences that the said Notices were admittedly not issued on 31st March, 2021. The said Notices were digitally signed on 01st April, 2021, or thereafter. The note appearing at the foot of each Notice clearly declares that the date of the affixation of digital signature shall be treated as the date of the Notice. The note reads "if digitally signed, the date of signature may be taken as date of document". In these Notices therefore, the date of the Notice itself is determined by the date of affixation of digital signature and not the date of generation. The contention of the Department that, the said note appearing at the footer of the Notice has no basis in law and should be ignored by this Court, cannot be accepted. The Department cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of R.K. Upadhyaya (Supra). Illustratively, in W.P. (C) 11010 of 2021, the Notice dated 31st March 2021 was booked for despatch through speed post on 10th June 2021, in this case, the Notice can be said to have been issued only on 10th June 2021 i.e. when it was booked for despatch through speed post. 25.27. With respect to the impugned Notices sent by e-mail and forming subject matter of category 'C' the Department has raised an additional defence that though the e-mails were admittedly despatched on 01stApril, 2021 or thereafter, the same was due to the time taken by ITBA e-mail software system to trigger the e-mails, this delay in despatch should not be attributed to the JAO for despatch and the Notices should be 'deemed' to have been issued on 31st March, 2021. This contention of the Department is specifically dealt with in answer to question no. (III). 26. Question No. (II): Whether "despatch" as per Section 13 of the Act of 2000 is sine qua non for issuance of Notice through electronic mail for the purpose of Section 149 of the Act of 1961?- The Court has answered this is in the affirmative, in favour of the assessee. AND Question No. (III): Whether the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination of the time of despatch of the impugned Notices issued through e-mail, Section 13 of the Act of 2000 has to be referred to. The relevant portion of Section 13 of the Act of 2000 is reproduced hereunder: "13. Time and place of despatch and receipt of electronic record.-(1) Save as otherwise agreed to between the originator and the addressee, the despatch of an electronic record occurs when it enters a computer resource outside the control of the originator. (2) ......" 26.4. Thus, on a plain reading of the aforementioned provision, it is evident that, the "despatch" under Section 13 of the Act of 2000 occurs when the electronic record reaches a "computer resource" outside the control of the "originator". 26.5. In this regard, it would also be relevant to refer to Section 2(k) and 2(za) of the Act of 2000, which defines 'computer resource' and 'originator' respectively, as under : "... (k) ―computer resource means computer, computer system, computer network, data, computer data base or software; (za) "originator" means a person who sends, generates, stores or transmits any electronic message; or causes any electronic message to be sent, generated, stored or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an electronic record occurs when it enters a computer resource outside the control of the originator i.e. when the ITBA's email system is triggered and the e-mail leaves the ITBA servers. [Daujee Abhushan (Supra), Yuvraj v. Income Tax Officer & Ors., (Supra), Advance Infra-developers (P) Ltd. (Supra)]. 26.10. Qua the aforesaid, the learned counsel for the petitioners Mr. Ved Jain and Mr. Kapil Goel had submitted a compilation of recent judgments passed by the Allahabad High Court following the Daujee Abhushan (Supra) case. On perusal of the judgments submitted, it is noted that, the Allahabad Court had in Santosh Krishna HUF (Supra), while dealing with the same issue of despatch, relied on the comments of the ADIT-5, ITBA O/o DIT (Systems) for determination of the aforesaid issue. In his comments, the officer forwarded the details as available with the ITBA Technical Team, the said details included (i) Date & Generation of Notice under Section 148 in ITBA System by AO, (ii) Date & Time of Digital Signing (DSC) in ITBA by AO, (iii) Date & Time of triggering of e-mail automatedly by ITBA Technical servers and (iv) Date & Time of delivering of e-mail. The Allahabad Court following t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act of 2000, hence, the despatch occurs when it leaves the last MTA server of the ITBA and enters a computer resource that the Department does not have control over, i.e. the MTA server of the e-mail service that the assessee is using. 26.16. The counsel for the petitioners have brought this Court's attention to the screenshot of the E-filing portal submitted by the assessee, Mr. Bhushan Lal Pandita in W.P.(C) 4567/2022. The said screenshot shows that the E-filing portal, for the notices issued to the said assessee under Section 142(1), duly publishes the date of issuance, however, in the case of the impugned Notice issued under Section 148 of the Act of 1961, the 'issued on date' is blank. 26. 17. This Court's attention was also drawn to the screenshot of the ITBA portal annexed to the Counter filed by the respondent in W.P.(C) No. 856/2022. The ITBA portal can only be accessed or viewed by the officers of the Department and not by the assessee. The screenshot of the ITBA portal reveals that in the "View/Enter Despatch Details" section the ITBA portal duly records the date of issue, date of despatch and date of service. It separately records the time on which the e-mail was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch 2021. 26. 23. We also take judicial notice of the fact that the Department from May, 2022, for Notices issued on or after 1st April 2021, has considered the date and time of despatch of the notices as recorded by the ITBA portal as the date of issuance and disregarded the date of generation of notice i.e. 31.03.2021. For notices despatched on or after 1st April 2021, the Department, following the Supreme Court's order in Ashish Agarwal (Supra) considered the notices as issued under Section 148A of the Act of 1961. This shows that the Department itself acknowledges and admits that the date of generation is distinct from date of issuance and the Department considers the despatch by ITBA Portal as the date of issue for the purpose of Section 149 of the Act of 1961. Finding for Notices falling under category 'C' Since the time taken by the ITBA email software system in triggering the e-mails is attributable to the Department, the AO is directed to determine the date and time on which the emails were triggered by the ITBA system server as per the ITBA records and consider the same as the date of issuance. Illustratively, in W.P.(C) 8994 of 2021 for the Notice dated 31st March 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with such procedure as may be prescribed]. (2) Every notice or other document to be issued, served or given for the purposes of this Act by any income-tax authority, shall be deemed to be authenticated if the name and office of a designated income-tax authority is printed, stamped or otherwise written thereon. (3) For the purposes of this section, a designated income-tax authority shall mean any income-tax authority authorised by the Board to issue, serve or give such notice or other document after authentication in the manner as provided in sub-section (2).] (Emphasis Supplied) [Authentication of notices and other documents. Rule 127A. (1) Every notice or other document communicated in electronic form by an income-tax authority under the Act shall be deemed to be authenticated,- (a) in case of electronic mail or electronic mail message (hereinafter referred to as the e-mail), if the name and office of such income-tax authority- (i) is printed on the e-mail body, if the notice or other document is in the e-mail body itself; or (ii) is printed on the attachment to the e-mail, if the notice or other document is in the attachment, and the e-mail is issued fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t; (iv) exercise of power to inspect registers of companies under section 134 of the Act; and (v) exercise of power of Assessing Officer under section 135 of the Act. ........... 10. Authentication of electronic record.―For the purposes of this Scheme, an electronic record shall be authenticated by the - (i) Commissioner of Income-tax (e-Verification) or the Prescribed Authority, as the case may be, by affixing its digital signature; ..." (Emphasis Supplied) 27.6. On a perusal of the circulars submitted by the learned counsel for the petitioners, it can be seen that they are not applicable to Section 148 notices. Instruction No. 1/2018 [F. No. 225/157/2017- ITA II] dated 12.02.2018 pertains specifically to notices issued under Section 143 read with Sections 142 & 2(23C) of the Act of 1961, hence it is inapplicable to the notices issued under Section 148 of the Act of 1961. Further, Notification No. 137/2021 dated 13.12.2021 deals with the e-Verification scheme and it applies only to Sections 133, 133B, 134 and 135 of the Act of 1961, hence this is also not applicable to the present case. 27.7. In this regard, it would be relevant to note that, the Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated and thus validly issued. 27.11. Further, it should be noted that, where the legislature intended to mandate the affixation of the digital signatures, it has specifically provided for the same in the provision itself. This is illustrated in Section 144 B(6)(i)(b) of the Income Tax Act, 1961, which reads as under : "Section 144B (6)(i)(b) of Income Tax Act, 1961 (i) an electronic record shall be authenticated by- xxx xxx xxx xxx (b) the assessment unit or verification unit or technical unit or review unit, as the case may be, by affixing digital signature; ..." 27.12. Similarly, there are other circulars issued by the Directorate of Income Tax (Systems) such as the circular titled "Miscellaneous Digital Signature Certificate (DSC) Policy-2018-Letter" [F.No. System/ITBA/Digital Signature/16-17/181] dated 16th February, 2018 recommending the use of the digital signatures certificate, however, there are no instructions of the Directorate of Income Tax (Systems) which makes affixation of digital signature on a Section 148 notice mandatory. 27.13. Along with the provisions relied on by the Revenue it would be pertinent to note that there is a note under every e-mail (wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the category 'D' dated 31st March 2021 and digitally signed on 31st March 2021 it has been stated that, they were not served on the assessees either by e-mail or post or by courier services as they were just uploaded on the E-filing portals of the assessees. It is the case of the petitioners that no real time alert was received by the assessee and the Department has not disputed this fact. 28.2. The mode of service of electronic record, i.e., Notices in the present case is provided under Section 282 of the Act of 1961 and Rule 127 of the IT Rules. The mode of service of a notice, electronically, is prescribed in Section 282 of the Act of 1961, it states that service maybe made by transmitting a copy in the form of electronic record as per chapter IV of the Act of 2000. It also states that the CBDT is empowered with the responsibility to make rules providing addresses for communication through electronic mail or electronic mail message. The CBDT vide Rule 127(b) of IT Rules prescribed email addresses, as made available by the assessees, for communication transmitted electronically. 28.3. Thus, there is no dispute that the transmission of an electronic notice by placing an aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Section 144 B(6)(ii)(a) reads as under: "Section 144B (6)(ii)(a) xxx xxx xxx xxx (ii) every notice or order or any other electronic communication shall be delivered to the addressee, being the assessee, by way of- placing an authenticated copy thereof in the registered account of the assessee; or. ..... and followed by a real time alert" Finding for Notices falling under category 'D' 28.7. We hold that, in order for this mode of transmission i.e. uploading of the Notices in the E-filing portal of the assessees, to be considered valid service, the Department should have issued a real time alert as provisioned in the aforementioned Section 144(B)(6)(ii)(a) of the Act of 1961. Since, the prescribed mode of service is not followed it is akin to no due despatch of Notices, therefore it cannot be said that the Notices were validly issued. 28.8. However, since the assessees in the present case did become aware of the Notices later and the assessment proceedings in their cases are still pending, we are not inclined to quash these Notices. 28.9. It has come on record that the ITBA records the time and date when the E-filing portal is accessed by the assessee, so the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee on the E-filing portal, as that is how the petitioners learnt about the notices, these notices will be held to have been issued on the date on which the Notices were first viewed by the assessees on their E-filing portal. 31. For the reasons and principles that we have laid down, we dispose of these Writ Petitions with the following directions: 31.1. Category 'A': The Notices falling under category 'A', which were digitally signed on or after 1st of April, 2021, are held to bear the date on which the said Notices were digitally signed and not 31st March 2021. The said petitions are disposed of with the direction that the said Notices are to be considered as show-cause-notices under Section 148A (b) of the Act as per the directions of the apex Court in the Ashish Agarwal (Supra) judgment. 31.2. Category 'B': The Notices falling under category 'B' which were sent through the registered e-mail ID of the respective JAOs, though not digitally signed are held to be valid. The said petitions are disposed of with the direction to the JAOs to verify and determine the date and time of its despatch as recorded in the ITBA portal in accordance with the law laid down in this judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch date of issuance is determined to be on or after 01st April, 2021, the Notices will be construed as issued under Section 148A (b) of the Act of 1961 as per judgment in Ashish Agarwal (Supra). 31.7. We may note that in the writ petitions, the petitioners have raised additional defenses to challenge the impugned Notices. Such additional defenses have not been considered by this Court and the petitioners shall be at liberty to raise all such additional defenses as available in law. 31.8. We are conscious that the time granted by the Supreme Court in Ashish Agarwal to the Department has since expired on 3rd June, 2022 however, the proceedings in the present writ petitions were stayed on 24th March, 2022 until the pronouncement of this judgment. Therefore, we grant the JAOs in the first instance eight (8) weeks time from today to determine the date of issuance of the Notices as per the law laid down in this judgment. 31.9. The Notices which in accordance with the law laid down in this judgment has been verified by the JAOs to have been issued on or after 01st April 2021 and until 30th June, 2021 shall be deemed to have been issued under Section 148A of the Act of 1961 as substitu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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