Reassessment notice under Section 147 issued one day late held time-barred; entire reopening proceedings quashed

HC held that the reassessment proceedings initiated u/s 147 were barred by limitation. The revenue issued notice on 01.07.2025, whereas the statutory limitation expired on 30.06.2025. Since the date of issuance was beyond the limitation period, the very initiation of reassessment was invalid in law. Relying on its earlier decision in Suman Jeet Agarwal, HC reiterated that any notice issued after the prescribed cut-off date cannot sustain reassessment jurisdiction. Consequently, the petition filed by the assessee was allowed and the impugned reassessment proceedings and notice were quashed.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether a notice under Section 148 of the Income Tax Act, 1961, generated and digitally signed within the limitation period but electronically despatched to the assessee after expiry of the limitation period, can be treated as "issued" within time.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Limitation for issuance of notice under Section 148 where electronic despatch occurs after expiry of the limitation period

(a) Legal framework (as discussed)

2.1 The Court considered the requirement under Section 148 read with Section 149 of the Income Tax Act, 1961 that a notice for reassessment must be "issued" within the prescribed limitation period.

2.2 The Court referred to its earlier decision interpreting the expression "shall be issued" in Section 149, and to Section 13 of the Information Technology Act, 2000 concerning "despatch" of electronic records.

(b) Interpretation and reasoning

2.3 The Revenue submitted, on instructions, that: (i) the Section 148 notice was generated on the departmental system on 30.06.2025 at 21:14:46; (ii) it was digitally signed on 30.06.2025 at 21:16:15; but (iii) due to a technical glitch, it was shared on the assessee's e-filing portal only on 01.07.2025 at 00:48 hours, and the copy annexed to the petition also showed transmission on 01.07.2025 at 09:18 hours.

2.4 The petitioner contended that limitation expired on 30.06.2025, and that the admitted fact of electronic despatch on 01.07.2025 rendered the notice time-barred.

2.5 The Court relied upon its earlier decision where it had held: (i) the expression "issue" in law requires that, after drawing up and signing, there must be an overt act of "due despatch" of the notice to the addressee; only upon such despatch can a notice be said to have been "issued"; (ii) within the electronic system used by the tax department, the drafting and sending of the email (with the notice attached) is done by the ITBA e-mail software system; and (iii) any time taken by that software system in triggering and transmitting the email is attributable to the Department, not to the assessee.

2.6 Applying that reasoning, the Court noted that for e-mails despatched on a date subsequent to the last date of limitation, the notices cannot be deemed to have been issued on the earlier date, even if generation and digital signing occurred within time.

(c) Conclusions

2.7 The Court held that, on the Revenue's own showing, the notice under Section 148 was despatched to the assessee on 01.07.2025, after expiry of the limitation period ending on 30.06.2025.

2.8 The act of generating and digitally signing the notice on 30.06.2025, without its despatch to the assessee on or before that date, did not satisfy the statutory requirement that the notice be "issued" within the limitation period.

2.9 The initiation of reassessment proceedings was therefore barred by limitation, and the impugned notice dated 30.06.2025 under Section 148 for Assessment Year 2019-20 was set aside; the petition was disposed of and pending application declared infructuous.

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