Section 148 IT Act notice valid if dispatched within limitation period regardless of actual delivery date

The HC dismissed the writ petition challenging a notice issued under Section 148 of the IT Act for Assessment Year 2014-2015. The court held that the notice issued on 31.03.2021 was valid as it was dispatched within the prescribed limitation period under the old regime. The court clarified that issuance, not actual communication, is relevant for determining compliance with Section 149 limitations. The notice could be dispatched on the last permissible date, and subsequent delivery would not render it time-barred. The petitioner's participation in proceedings by filing responses and returns further validated the notice's legitimacy.

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Issues Involved:
1. Validity of the notice under Section 148 of the Income Tax Act, 1961.
2. Timeliness and issuance of the notice.
3. Applicability of amended provisions of the Finance Act, 2021.

Summary:

Validity of the Notice:
The petitioner challenged the notice dated 31.03.2021 issued under Section 148 of the Income Tax Act, 1961, arguing it was time-barred and should have been issued under the amended provisions effective from 01.04.2021. The petitioner contended that the notice was digitally signed at 8.16 p.m. on 31.03.2021 but was received only on 01.04.2021, thus beyond the prescribed period of limitation.

Timeliness and Issuance of the Notice:
The court observed that the notice was digitally signed and issued on 31.03.2021, which was within the permissible time limit under the old regime. The notice was dispatched electronically on 01.04.2021 and physically on 07.04.2021. The court emphasized that issuance is deemed complete once the notice is ready for dispatch, irrespective of the actual date of receipt by the petitioner.

Applicability of Amended Provisions:
Referring to the Supreme Court's decision in Union of India vs. Ashish Agarwal, the court noted that the new provisions of the Finance Act, 2021, are remedial and should apply to notices issued after 01.04.2021. However, since the petitioner's notice was issued on 31.03.2021, it fell under the old provisions. The court distinguished the petitioner's case from those covered by the Supreme Court's decision, as the notice was validly issued before the amendment came into force.

Conclusion:
The court held that the notice issued on 31.03.2021 was valid and not time-barred. The petitioner had participated in the proceedings by filing a return of income and responding to subsequent notices. Therefore, the writ petition was dismissed, and the challenge to the impugned notice failed.

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