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TMI Blog2024 (7) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... on of India challenging the issuance of notice under Section 148 of the Income Tax Act, 1961 by the respondent-Department. Though the challenge in all these writ petitions are on various grounds, both on maintainability as also on the merits, however one preliminary objection which runs through all these batch of writ petitions is the objection of, the notice being barred by limitation under the provisions of the Income Tax Act, 1961 (for short, 'the Act'). 2. In all these writ petitions, admittedly the last date for service of notice and initiating proceedings under Section 148 of the Act was coming to an end on 31.03.2021. In majority of the cases, the notice under challenge in the instant writ petitions is dated 31.03.2021, however the notices have been issued from the office of the respondent-Department either on 01.04.2021 or on subsequent dates. This is the bone of contention as regards whether the notice which is issued itself on or after 01.04.2021 would be hit on the grounds of limitation. Since the issue is common in all these writ petitions, this Court is not referring to the actual dates in each of the notices. 3. Heard Mr. Dundu Manmohan, learned counsel for petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hit by limitation. 6. Learned counsel for the petitioners highlighted the aspect that the documents / records maintained by the respondent-Department would clearly depict the actual date of dispatch and the date of service. In a few cases there is a discrepancy which is reflected so far as the date of dispatch and the date of service mentioned in the other pages of the portal. According to the learned counsel for the petitioners, it is the bounden duty of the respondents to mandatorily maintain a record of the date on which the dispatch was made and also the date of service of the notice in the portal so that the same is easily available with the respondents, as these notices are mostly sent by e-mail which easily reflects the time of dispatch and the date and time of delivery. The page in the portal would easily reflect the date and time at the originator's place and the date and time at the recipient's end. In case if the respondent is unable to produce records in this regard, the contention of the respondents of treating the notice dated 31.03.2021 as proper service of notice is not to be accepted as 'gospel truth'. 7. Though there are other grounds also raised and highlighte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 149, the service of notice loses importance and such a notice so issued within the period of limitation cannot be interdicted only on the ground of service being made effective beyond a period of limitation. 11. He further relied on the decision of the High Court of Gujarat in Rajesh Sunderdas Vaswani vs. C.P. Meena - Deputy Commissioner of Income Tax & 5 others 2017 (392) I.T.R. 571 (D.B.), wherein the Division Bench held that once when the notice is handed over to post-office, it goes irretrievably out of the hands of the Assessing Officer and merely because there is delay at the behest of the postal authorities, the date of issuance would not get postponed. 12. Likewise, reliance was also placed by the learned Senior Standing Counsel for the respondents on a judgment rendered by the Madras High Court in the case of Malavika Enterprises vs. Central Board of Direct Taxes and others [2022] 445 I.T.R. 651 (Mad), wherein the Madras High Court also took the stand that date of issuance of notice is what matters and not the date of service. 13. Further, the learned Senior Standing Counsel for the respondents placed reliance on the judgment of the High Court of Gujarat in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf have been dispatched from the office of the I.T. Department on or before 01.04.2021 which itself is beyond the period of limitation. 17. It is relevant at this juncture to note that upon coming into force of the Finance Act, 2021, certain amendments were brought to the Income Tax Act, 1961 wherein Section 148 stood substituted with Section 148A by the Finance Act, 2021 w.e.f. 01.04.2021. In the landmark decision of the Hon'ble Apex Court in the case of Ashish Agarwal (supra) which has also been followed by practically every High Court in the country, held that for any notice of re-assessment on or after 01.04.2021 it would be the new amended law which would be governing the field, as the un-amended provisions were valid only till 31.03.2021. 18. We leave that issue for the time being there itself. 19. It is necessary at this juncture to refer to the decision of the Madras High Court in the case of Smt. Parveen Amin Bhathara vs. Income-Tax Officer [2022] 446 I.T.R. 201 (Mad), wherein the learned Division Bench at paragraph No.12, after dealing with certain judicial precedents on the issue, has held as under, viz., "12. ... ... ... Thus, the expression 'to issue' in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India and others [2022] 444 I.T.R. 41 (All.). The Division Bench, while dealing with the provisions of the Information Technology Act, 2000 at paragraph Nos.18, 19 and 20, held as under, viz., "18. Since Section 149 of the Act 1961 requires notice to be issued by Income Tax Authority, therefore, in terms of sub Section (1) of Section 282 A it has to be signed by that authority and to be issued in paper form or communicated in electronic form by that authority in accordance with procedure prescribed. 19. The communication in electronic form has been prescribed in Rule 127 A of the Rules 1962 which provides a procedure for issuance of every notice or other document and the e-mail in electronic form/electronic mail which has to be issued from the designated e-mail address of such income tax authority. 20. Thus, after digitally signing the notice the income tax authority has to issue it to the assessee either in paper form or through electronic mail. Sub-Section (1) of Section 13 of the Act 2000 provides that dispatch of an electronic record occurs when it enters a computer resource outside the control of the originator. The aforesaid sub-Section (1) of Section 13 indica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned notice dated 31/03/2021 (served through Email to the petitioner on 16/04/2021) stands quashed. However, it is left open for the respondents to take recourse to the procedure laid down in newly enacted section 148-A of the Income Tax Act, 1961 if it is required under the law." 22. Recently, a Division Bench of the Delhi High Court also endorsing the view taken by the Allahabad High Court as well as the Madhya Pradesh High Court (supra), in the case of Suman Jeet Agarwal (supra), has elaborately dealt with the said issue and held as under, viz., "16.1. The expression "issued" has been judicially interpreted by the courts as framing of the order and taking necessary action to despatch the same. Therefore, mere generation of notice on the Income Tax Business Application portal does not satisfy the test of "issue" without proving that the same has been despatched within the time barring period. (Delhi Development Authority v. H. C. Khurana (1993) 3 SCC 196). 16.2. Even though the service of notice is not relevant, however, for determining if a notice has been validly issued, the notice should be sent forth and go beyond the control of the authority issuing the same, to conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, for the impugned notices under consideration, the date of issuance is conspicuously not mentioned on any of the assessee's accounts on the e-filing portal. Illustratively the screen shot for PAN AAFCA 9047H is extracted below : Notice/Communication Reference ID : 100036566022 Notice u/s. Income Tax Business Application/AST/ F/17/202122/1034161151(1) Document reference ID Description : (Income Tax Business Application) Issue letter Submit Response Notice/Letter PDF Issued on : 13-Jul-2021 Seek/View Adjournment Notice/Communication Reference ID : 100033602029 148 Notice u/s. Income Tax Business Application/AST/S/148/2020-21 /1032044808(1) Document reference ID Description : (Income Tax Business Application) Notice u/s. 148 View response of Income-tax Act, 1961. Notice/Letter PDF Issued on : Seek/View Adjournment 16.8. A conjoint reading of the relevant provisions of the Act of 1961 and Act of 2000, leads to the inescapable conclusion that for the notice to be validly "issued" it has to be digitally signed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the impugned notices have been posted or the date and time on which the e-mail was sent from the e-mail ID of the jurisdictional Assessing Officer. (CIT v. Chetan Gupta [2016] 382 ITR 613 (Delhi)). 18.2. All impugned notices sent by e-mail have been issued from the designated e-mail address of the jurisdictional Assessing Officers, therefore, to allege that the triggering of e-mail by the Income Tax Business Application is separate from the jurisdictional Assessing Officer is factually incorrect. The process of triggering e-mail by the Income Tax Business Application software system is for and on behalf of the jurisdictional Assessing Officer and therefore, attributable to the jurisdictional Assessing Officer. ...... .... ... .. 9.1. The screenshot annexed as annexure P-5 in W. P. (C) No. 4567 of 2022 shows that each notice in addition to a document identification number, also contains a communication reference ID ("CRI"). The communication reference ID is generated by the Income Tax Business Application po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid, annexure R-2 annexed with the Department's counter affidavit in W. P. (C) No. 856 of 2022 can be perused, which is the screenshot of the Income Tax Business Application screen of the assessee as visible to the jurisdictional Assessing Officer only. In this annexure, the Department itself has extracted the relevant portion of the screenshot, which has complete details of the time at which the e-mail was sent, time at which the e-mail was delivered, etc. evidencing that the date and time when the e-mail containing the impugned notice as an attachment was sent by the Income Tax Business Application servers, is duly available with the Department. The relevant extract of the screenshot is reproduced hereinbelow : 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 31-3-2021 AHIPG3000F Anand Goel Notice u/s. 148 Income Tax Business Application/AST/S/148/2020-21/103211/6278(1) Attachments E-mail E-mail delivered Sent E-mail (?) E-mail delivery status E-mail sent on E-mail delivered on Shared with e-Proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer and Income Tax Business Application perform two inseparable and complementing functions for the Department, which together constitute generation of notice + drafting of the e-mail by the Income Tax Business Application e-mail software and its despatch through dedicated Income Tax Business Application servers. Thus, whilst the Department is the attributed originator of the impugned notices within the meaning of section 11(c) of the Act of 2000, Income Tax Business Application portal is the "computer resource" under the control of the Department. 26.8. In the light of the aforesaid findings of this court, the submissions made by Zoheb Hossain, learned senior standing counsel for the Department, that the jurisdictional Assessing Officer and the Income Tax Business Application are distinct and that the jurisdictional Assessing Officer is the originator and hence not liable for delay in despatch, are untenable in law and facts. 26.9. Now, in order to determine when does "despatch", i. e., the transmission of electronic record or the notices in the present case, from the Department occur, we may first note the precedence set by several High Courts in the context of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esource belonging to the Department. As established earlier, the Department is the originator as per section 11(c) of the Act of 2000, hence, the despatch occurs when it leaves the last message transfer agents, server of the Income Tax Business Application and enters a computer resource that the Department does not have control over, i. e., the message transfer agents server of the e-mail service that the assessee is using. .... ... .... . 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 April 1, 2021, are held to bear the date on which the said notices were digitally signed and not March 31, 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 jurisdictional Assessing Officers, though not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under section 148A (b) as per the directions of the apex court in the Ashish Agarwal (supra) judgment." 24. With the aforesaid judicial precedents and the fact that the Delhi High Court has extensively dealt with these contentions (which have also been the contention of the learned Senior Standing Counsel for the Income Tax, for the respondents, in the present batch of writ petitions), and rendered the judgment in favour of the assessee, and which has not been further challenged by the respondent-Department till now. Therefore, we also are fully in agreement and endorse the views laid down by the Division Bench of the Delhi High Court in the case of Suman Jeet Agarwal (supra) and hold that the impugned notices in all these batch of writ petitions are barred by limitation under Sections 148 and 149 of the Act, since the said notices have left the I.T.B.A. portal on or after 01.04.2021. 25. The objection raised by the learned counsel for the petitioners that the impugned notices under challenge are barred by limitation is sustained. Therefore, the impugned notices in all these writ petitions are as a consequence set aside / quashed on the ground of it being barred by limitation. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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