TaxTMI 
TaxTMI 
2022 (9) TMI 1384
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....856/2022 & CM No.2413/2022 (for stay) W.P.(C) 900/2022 & CM No.2551/2022 (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....
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....Private Limited, Urban Punjab, Mahender Kumar Kashyap, SLG Global Tex Private 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 ....
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....ant Jha, SPC for UOI with Mr. Animesh Mani Tripathi, Advocate. Mr.Kunal Sharma, 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 ....
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....sment could be initiated within 3 years from the end of the relevant AY. Thus, under amended Section 149(1)(a) of the Act of 1961, as on 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,....
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.... other mode and assessee came to know later on through Portal or receipt of subsequent notice under Section 142(1). 5. Category E: is in respect of writ petitions where Notice is dated 31st 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 ....
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.... (a) Generating Notice + digitally signing it; (b) Generating Notice (No option to digitally sign). 7.3. If the JAO exercises option (a) i.e., to generate Notice + digitally sign it, a Notice is generated on the ITBA portal 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 gene....
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....in, Mr. Puneet Rai and Mr. Sunil Aggarwal, the learned Senior Standing counsel submitted arguments on behalf of the respondents. 9. Mr. Zoheb Hossain, learned Senior Standing counsel for the Department has submitted as follows: 9.1. After the generation of Notice 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 cont....
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.... AO and the ITBA portal are distinct, thus the time taken by the ITBA portal for triggering the e-mail cannot be attributed to the AO. 9.8. As per the provisions of Section 282A (2) of the Act of 1961, if a document duly mentions the name and designation of the officer, it would 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 s....
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....llotted a DIN by the ITBA. The despatch of Notices on 01st April, 2021, or thereafter is also not determinative for deciding when the Notices were 'issued'. 12.2. Category 'B': The affixation of DSC on the Notices is not mandatory. The Notices were generated on 31st March, 2021, with a DIN and the name & 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 syst....
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....hat 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 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 bear....
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....eneration of notice on the ITBA Screen and signing the same is not sufficient for satisfying the test of 'issued' and it is only when the Notice has been despatched in terms of Section 13 of the Act of 2000, would the same be declared to be issued. In this regard reliance has been placed on the judgment of the Supreme Court in UOI vs. G.S. Chatha Rice Mills, (2021) 2 SCC 209, 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....
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....e appearing in the footer on the impugned Notices. 17.8. The Compliance Affidavit, in paragraph 6 records the admission of the Department that the impugned Notices were indeed despatched by ITBA servers even in case of category 'C' on 01st April 2021 or thereafter. Thus, there is a clear admission that the impugned Notices are time barred. 18. Mr. Piyush Kaushik, learned counsel for the petitioner, submitted as under: 18.1. As 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 ....
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....ent ..." 19.3. The date of issuance has been selectively withheld only with respect to the impugned Notices, as providing the information would make it evident that the date of issuance even as per the ITBA software system is 01st April, 2021, or thereafter, as the software is also programmed to record the date of issuance as the date of despatch. 20. Mr. T.M. Shiv Kumar, learned counsel for the petitioner submitted as under: 20.1. As per the provisions of Section 282A of the Act of 1961, 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 putti....
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....P. (C) No. 856 of 2022 can be perused, which is the screenshot of the ITBA screen of the assessee as visible to the JAO only. In this Annexure, the Department itself has extracted relevant portion of the screenshot, which has complete details of the time at which the e-mail was sent, time at which the email was delivered, etc. evidencing that the date and time when the email containing the impugned Notice as an attachment was sent by the ITBA servers, is duly available with the Department. The relevant extract of the 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 ....
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.... digital signature, are valid under Section 282A the Act of 1961 read with Rule 127A of the IT Rules? V. Whether upload of the Section 148 Notice on the "My Account" of the assessee on the E-filing portal is valid transmission under the Act of 1961? Analysis and reasons 25. Question No. (I): Whether the JAO's act of generating Notice in the ITBA portal on 31st March, 2021, without despatching the Notice meets the test of the expression 'shall be issued' in Section 149 of the Act of 1961, and saves the Notices from being time barred? - The Court has answered this in the negative in favour of the assessee. 25.1. It has emerged as an admitted position on 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 Ma....
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....rculation'. The issue of a charge-sheet, therefore, means its despatch to the government servant, and this act is complete the moment steps are taken for the purpose, by framing the chargesheet and despatching it to the government servant, the further fact of its actual service on the government servant not being a necessary part of its requirement ..." (Emphasis supplied) In the aforesaid judgment the Supreme Court emphatically laid down that despatch is an essential condition to complete the act of issuance. The Court clarified that service on the recipient was not a condition precedent for satisfying the act of issuance. 25.6. It would also be useful to refer to the judgment of the Supreme Court in the case of R.K. Upadhyaya (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 'serv....
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.... would be the date on which the said notices were actually handed over to the post office for the purpose of booking for the purpose of effecting service on the petitioners. Till the point of time the envelopes are properly stamped with adequate value of postal stamps, it cannot be stated that the process of issue is complete. In the facts of the present case, the impugned notices having been sent for booking to the Speed Post Centre only on 07.04.2010, the date of issue of the said notices would be 07.04.2010 and not 31.03.2010, as contended on behalf of the revenue. In the circumstances, impugned the notices under section 148 in relation to assessment year 2003-04, having been issued on 07.04.2010 which is clearly beyond the period of six years from the end of the relevant 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 ....
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....ssee on 16th April, 2021.The High Court held that the Notice was issued on 16th April, 2021 and quashed the same reserving liberty to the Department to issue a fresh Notice under Section 148A of the Act of 1961, in accordance with law. The grounds for challenging the impugned Notice in the said case were same as have been raised herein for challenging the impugned Notices falling under category 'A' and 'B'. 25.10. The judgment of the Allahabad High Court in Daujee Abhusan Bhandar (Supra), was earliest to hold that drawing up a Notice on 31st March, 2021, and digitally signing the same, in the absence of despatch, does not amount to issuance of Notice within the meaning of Section 149 of the Act of 1961. The High Court after elaborately discussing the provisions of Sections 282 and 282A of the Act of 1961, and the provisions of Section 13 of 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....
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....ortal and digital signing of the Notice is executed by the JAO, the function of drafting of the e-mail to which the Notice is attached and triggering the e-mail to the assessee is performed by the ITBA e-mail software system. Thus, mere generation of Notice on the ITBA Screen cannot in fact or in law constitute issue of notice, whether the notice is issued in paper form or electronic form. In case of paper form, the notice must be despatched by post on or before 31st March 2021 and for communication in electronic form the e-mail should have been despatched on or before 31st March 2021. In the present writ petitions, the despatch by post and e-mail was carried out on or after 01st April 2021 and therefore, we hold that, the impugned Notices were not issued on 31st March 2021. 25.14. The Department has not disputed the correctness of the law settled by the Supreme Court in the 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....
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....ll issue instructions to the Assessing Officers. ..." (Emphasis Supplied) 25.16. The Department sought to contend that the Madras High Court in Malavika Enterprises (Supra) has struck a discordant chord with the judgment in the Daujee Abhusan Bhandar (Supra). However, on a perusal of the judgment in Malavika Enterprises (Supra), we find that in the said case the notice had been despatched on 31st March, 2021, at 6.42 pm by the ITBA server, though served on the assessee on 01st April, 2021, at 2.00 am and therefore, the Madras High Court concluded that the notice has been validly issued on 31st March, 2021. The relevant portion of paragraph 8 of this judgment reads as follows: "... 8. Coming to the facts of the case, it is stated that notice under section 148 of the Act of 1961 is said to have been issued on 313-2021 for the assessment year 2013-2014, followed by consequential notices. It is the case 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... ..." W....
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....circulars use the words "generation" and "issuance" distinctively. In this regard reference may be made illustratively to the following Instructions: a. The ITBA Assessment Instruction No. 2 [F.No. System/ITBA/Instruction/Assessment/16-17/177 dated 01.08.2016] issued by the Directorate of Income Tax (System) mentions that: "the AO Staff/ AO Inspector will not be able to generate the notice but will be able to view the notices already generated by the AO for taking a printout of the same, for issue to the assessee." b. The ITBA Assessment Instruction No. 3 [F No. System/ITBA/Instruction/Assessment/177/16-17/] dated 03.02.2017, also illustrates the same distinction: "Details of the Authority/party from whom information is requisitioned can be entered alongwith date for compliance and the Notice can then be generated and issued." 25.19. The counsel for the Department have also sought to argue that generation of a Notice with DIN on ITBA Screen conclusively indicates that 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 d....
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....21. 25.22. In this regard, it would be useful to note that, the impugned Notice in W.P. (C) 5316 of 2022 was classified in category 'C'. However, during the pendency of the proceedings, the JAO on 30th July 2022 determined that the said Notice though generated and signed on 31st March 2021 was issued through e-mail by the ITBA servers on 6th April, 2021. It has been brought to this Court's attention that the JAO has now self-determined that the same shall be governed by the judgment of the Supreme Court in Ashish Agarwal (Supra) and JAO has accordingly proceeded to treat the Notice dated 31st March 2021 as notice under Section 148A(b). The aforesaid acts of the JAO belie the submissions of the counsel for the Department that the generation of the Notice on the ITBA screen constitutes issuance. It further substantiates the contention of the petitioners that the date and time of issue of the emails by the ITBA servers are readily available with the Department and therefore there is no disputed issue of facts. 25.23. We therefore answer question no. (I) in negative against the Department and hold that the impugned Notices dated 31st March, 2021, which were despatched on 1st A....
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....and digital signing. ..." Finding for Notices falling under category 'A' We therefore hold that the impugned Notices falling under category 'A' shall be held to be dated as on the date DSC was affixed. Since the date of affixation of DSC on the impugned Notices is 1st April 2021 and thereafter they were sent and delivered through the ITBA portal on or after 1st of April 2021, the impugned Notices falling under category 'A' can only be said to have been issued on or after 1st of April 2021. Illustratively, in W.P. (C) 1759/2022 the Notice even though dated 31st March 2021 was digitally signed on 1st April 2021 and thereafter was sent and delivered through ITBA portal on 15th April 2021, in this case, the date of the impugned Notice is 1st April 2021 (i.e., the date on which it was digitally signed) and it was issued through e-mail on the 15th of April 2021. Finding for Notices falling under category 'E' 25.26. With respect to the impugned Notices which have been classified as category 'E', the date of despatch through speed post is determined as the date of issuance following the judgment of the Supreme Court in the case of R.K. Upadhyaya (Supra). Illustra....
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....lace of despatch and receipt of electronic record or electronic communication shall have the same meaning as provided in Section 13 of the Information Technology Act, 2000 (No.21 of 2000)." "... Notification No. 4/2017 dated 3rd April, 2017 titled DGIT(S)/DIT(S)-3/AST/Paperless Assessment Proceedings/96/2015-16 authorized by the Principal Director General of Income Tax (Systems) "n) For the purpose of this notification the time and place of despatch and receipt of electronic record or electronic communication shall have the same meaning as provided in Section 13 of the Information Technology Act, 2000 (No. 21 of 2000). Further, the registered account on the E-filing website is deemed to be computer resource designated by assessee in accordance with Section 13 of the Information Technology Act, 2000 (No. 21 of 2000). ..." Therefore, the contention of Mr. Sunil Aggarwal, learned counsel for the Department, that Section 13 of the Act of 2000, is not applicable to the impugned Notices issued through e-mail, is in contradiction with the aforementioned notifications and the statutory provision of Section 282 of the Act of 1961. 26.3. Now therefor....
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.... is attached; and (b) for despatching the said e-mail with Notice to the assessee through e-mail; as well as; (c) for sharing the said Notice on assessee's 'My Account' on the E-filing portal. Hence, the JAO and ITBA perform two inseparable and complementing functions for the Department, which together constitute generation of Notice + drafting of the e-mail by the ITBA e-mail software and its despatch through dedicated ITBA 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, ITBA portal is the 'computer resource' under the control of the Department. 26.8. In light of the aforesaid findings of this Court, the submissions made by Mr. Zoheb Hossain, learned Senior Standing counsel for the Department, that the JAO and the ITBA are distinct and that the JAO 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 ITBA....
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....erver of the recipient's e-mail service. In case the recipient is using an intermediary server, it reaches the intermediary MTA i.e. server of the intermediary. It thereafter, finally reaches the recipient. In the case on hand, the Department's email service is the ITBA e-mail software system and the assessee's email service is G-mail, Outlook etc. The ITBA e-mail software uses dedicated servers for transmitting e-mails and therefore the e-mail is despatched when the same leaves the ITBA servers for the recipient assessee's designated e-mail service servers. A simplified illustration of the SMTP model showing this process, as confirmed by the counsel for the petitioners and respondents, is reproduced hereinunder: 26.14. For the purpose of this illustration, the double arrows indicate transmission between computer resources that are of the ITBA e-mail software system and therefore, within the control of the Department; and the single arrows indicate transmission between computer resources that are within the control of or used by the assessee. 26.15. This illustration, as verified by the respondents, attests to the fact that the MTA i.e. server of the ITBA is a computer resour....
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.... admitted in the Compliance Affidavit. The programming to despatch the Notices in a controlled manner and batch mode was a pre-existing fact and to the knowledge of the Department. The time taken in despatch of the e-mail on 31st March, 2021, was therefore as per the controls set in the ITBA system. 26.20. We are in respectful agreement with the law laid down by the various High Courts in Daujee Abhushan (Supra), Santosh Krishna HUF (Supra), Mohan Lal Santwani (Supra), Advance Infradevelopers (P) Ltd. (Supra) and Yuvraj v. Income Tax Officer (Supra), that for determining when Notices were issued, the date and time of when the ITBA e-mail software system is triggered and the Notices leave the last ITBA server would be considered. 26.21. We therefore answer question no. (II) in affirmative and hold that despatch as per Section 13 of the Act of 2000, is a sine qua non and happens when the electronic mail message leaves the ITBA's servers. 26.22. We answer question no. (III) against the Department and hold that the time taken by the ITBA's e-mail software system in triggering the e-mail and transmitting the said e-mails from the ITBA servers is attributable to the Department a....
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....the e-mail system software of the ITBA 15 days after generation of notice and despatched the unsigned notice through email or (b) generated Notice without any DSC which ideally should have triggered the e-mail system software of the ITBA immediately. 27.2. It was stated by the learned counsel for the Department that in view of Section 282A of the Act of 1961 and Rule 127A of the IT Rules, affixation of DSC is not mandatory. A notice will be considered authenticated if the name and office of the designated income-tax authority is printed, stamped or otherwise written. It was also pleaded that the lack of DSC is merely a defect and would fall under Section 292B of the Act of 1961. 27.3. The learned counsel for the petitioners, in response, had relied upon Instruction No. 1/2018 [F. No. 225/157/2017- ITA II] dated 12.02.2018 and Notification No. 137/ 2021 dated 13.12.2021 and argued that the affixation of DSC is mandatory as per these circulars. 27.4. The aforementioned provisions relied on by the Revenue are reproduced hereunder: [Authentication of notices and other documents. Section 282A. (1) Where this Act requires a notice or other document to be issued....
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....- 'Section 143, Read with Sections 142 & 2(23C), of the Income Tax Act, 1961'- Assessment- Conduct of Assessment Proceedings in Scrutiny Cases Electronically' "Sub-section (23C) of Section 2 of the Income-tax Act, 1961 (Act), applicable from 1-6-2016, provides that "hearing" includes communication of data and documents through electronic mode. Accordingly to facilitate conduct of assessment proceedings electronically, vide letter dated 23-6-2017, in file of even number, Board had issued a revised format of notice(s) under section 143(2) of the Act. Para 3 of these notice(s) provided that assessment proceedings in cases selected for scrutiny would be conducted electronically in 'E-Proceeding' facility through assessee's account in E-filing website of Income-tax Department. ....... 4.2 Use of digital signature by Assessing Officer: All Departmental orders/communications /notices being issued to the assessee through the 'e-Proceeding' facility are to be signed digitally by the Assessing Officer. ...." (Emphasis Supplied) Notification No. 137/2021 - S.O. 5187(E) - e-Verification Scheme, 2021, dated 13.12.2021. "....... ....
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....uthority to issue notice and documents under the Act, either in paper form or in electronic form, in accordance with such procedure as may be prescribed. The relevant portion of the Memorandum Explaining the Finance Bill, 2016 is reproduced hereunder: "Providing legal framework for automation of various processes and paperless assessment It is proposed to amend the relevant provisions of the Act so as to provide adequate legal framework for paperless assessment in order to enhance efficiency and reduce the burden of compliance. A series of changes are proposed to achieve this end. Sub-section (1) of section 282A provides that where a notice or other document is required to be issued by any income-tax authority under the Act, such notice or document should be signed by that authority in manuscript. It is proposed to amend sub-section (1) of section 282A so as to provide that notices and documents required to be issued by income-tax authority under the Act shall be issued by such authority either in paper form or in electronic form in accordance with such procedure as may be prescribed. .... These amendments will take effect from the 1st d....
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.... 27.15. From a combined reading of the relevant provisions, the explanation to the Finance Bill, 2016 and the abovementioned note, it becomes evident that the affixation of DSC in notices issued under Section 148 of the Act of 1961 has not been made mandatory. As long as the requirements of Section 282A of the Act of 1961 and Rule 127A of the IT Rules, are followed the notices would be considered to be authenticated. Finding for Notices falling under category 'B' 27.16. In the present case, the Notices were sent from the designated e-mail ID of the respective JAOs, fulfilling all requirements of authentication as per the relevant provisions. There was no doubt in the mind of the assessees that the Notices were sent by the Department. Therefore, the Notices falling under category 'B' would not be invalid simply because DSCs were not appended to the Notices. 27.17. The JAO is therefore directed to determine time of despatch as recorded by the ITBA portal for each of these Notices and the date and time of despatch as determined by the JAO will be considered to be the date of issuance. Illustratively, in W.P.(C) No. 1761 of 2022 for the Notice dated 31st March 2021, which ....
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....7 is optional. The assessees have to register for the same and can also choose to opt out of it by notifying the Department. 28.5. It is unclear to us as to why e-mail based communication of notices is made optional in the Notification No. 4/2017, despite it being the statutorily prescribed mode of service through electronic transmission. Further, the ITBA portal itself is programmed in such a way that it triggers the e-mail software system when a notice is generated by the JAO and an authenticated copy of the same is thereafter also uploaded in the E-filing portal of the assessee, hence the Department cannot contend that it had done away with e-mailing of notices issued. Most importantly, the Department has been consistently using this mode of e-mail based communication to transmit notices and no reason whatsoever has been provided to explain as to why these Notices were not e-mailed to the select few assessees falling under category 'D' and was only uploaded on the Efiling portal. It is also unclear as to why the Notices though digitally signed on 31st March 2021 were never e-mailed to the assessees, because, as per the Compliance Affidavit, upon affixation of DSC by the JAO t....
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....d above, the Notices dated 31st March, 2021 were issued by the ITBA e-mail Software system to unrelated e-mail addresses which has no concern with the petitioner-assessee. In those facts, the Department cannot be permitted to contend that there was due despatch of Notice. For constituting 'due despatch', notice should be issued to the e-mail addresses duly recognized in Rule 127, Sub rule 2(b) (i) to (iv), which reads as under :- "Rule 127, Sub rule 2(b) (i) to (iv) xxx xxx xxx xxx xxx xxx xxx xxx (b) for communications delivered or transmitted electronically- (i) e-mail address available in the income-tax return furnished by the addressee to which the communication relates; or (ii) the e-mail address available in the last income-tax return furnished by the addressee; or (iii) in the case of addressee being a company, e-mail address of the company as available on the website of Ministry of Corporate Affairs; or (iv) any e-mail address made available by the addressee to the income-tax authority or any person authorised by such income-tax authority." 30. Additionally, it is a settled position of law that the n....
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....nce. If the date and time of despatch recorded is on or after 1st of April, 2021, the Notices are to be considered as show-cause-notices under Section 148A (b) as per the directions of the apex Court in the Ashish Agarwal (Supra) judgment. 31.4. Category 'D': The petitions challenging Notices falling under category 'D' which were only uploaded in the E-filing portal of the assessees without any real time alert, are disposed of with the direction to the JAOs to determine the date and time when the assessees viewed the Notices in the E-filing portal, as recorded in the ITBA portal and conclude such date as the date of issuance in accordance with the law laid down in this judgment. If such date of issuance is determined to be on or after 1st of April 2021, the Notices will be construed as issued under Section 148A (b) of the Act of 1961 as per the Ashish Agarwal (Supra) judgment. 31.5. Category 'E': The petitions challenging Notices falling under category 'E' which were manually despatched, are disposed of with the direction to the JAOs to determine in accordance with the law laid down in this judgment, the date and time when the Notices were delivered to the post office for des....