TaxTMI 
TaxTMI 
2024 (7) TMI 1186
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....; Mr. Y. Ratnakar, learned Senior Counsel, in W.P. Nos. 20925 & 20935 of 2022; Mr. Shaik Jeelani Basha, learned counsel for the petitioner in W.P. No. 21805 of 2022; Mr. A.V.A. Siva Kartikeya, learned counsel for the petitioner in WP. No. 19083 of 2022; and Mr. Cuddapah Nanda Gopal, learned counsel for the petitioners in WP.No.21949 & 22543 of 2022. For the Respondent : Mr. J.V. Prasad, learned Senior Standing. Counsel for Income Tax, for the respondents. COMMON ORDER : (PER THE HON'BLE SRI JUSTICE P. SAM KOSHY) The instant batch of writ petitions is filed by the petitioners under Article 226 of the Constitution 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 ....
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.... terms of the decision of the Hon'ble Apex Court in the case of Union of India and others vs. Ashish Agarwal (2022) 444 I.T.R. 1 (S.C.), it should be the amended provision which would come into force and for this reason, the impugned notice in all these writ petitions would not be sustainable. Nonetheless, the primary contention was that since in all these batch of writ petitions, the notice under Section 148 being issued beyond 31.03.2021 by the respondent-Department itself, as would be evident from the documents available with the respondent-Department, whether these impugned notices are liable to be vitiated holding them to be 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 als....
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....pally and technically, it has to be presumed that dispatch has been made but for the technicalities that arise because of the system and not because of the fault or lacking on the part of the authorities. 10. In support of his contention, the learned Senior Standing Counsel for the respondents, heavily relied on the judgment of the Hon'ble Apex Court in the case of R.K. Upadhyaya vs. Shanabhai P. Patel 1987 (166) I.T.R. 163, contending that Section 149 of the Act refers to "notice" whereas Section 148 refers to the "service of notice", and as long as there is an effective issuance of notice before the period of limitation under Section 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 an....
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.... and also the learned Senior Standing Counsel for the respondents, we went through certain records which were produced before us and some of which were part of the pleadings. Though there were some discrepancies reflected in the screen-shots taken from the portal pages, but on actual verification of the records which has come before us and which clearly indicate that the notices have been issued in all these writ petitions (not served) itself on 01.04.2021 or on a later date. The question of service of these notices and the date of service of notices upon the petitioners is of no relevance or consequence in all these writ petitions, as the notices itself 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....
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....ions that the issuance of notice under section 149 is complete only when the same is issued in the manner as prescribed under section 282 r/w rule 127 of the Income Tax Rules prescribing the mode of service of notice under the Act. The signing of notice would not amount to issuance of notice as contemplated under section 149 of the Act. In other words, the requirement of issuance of notice under section 149 is not mere signing of the notice under section 148, but is sent to the proper person within the end of the relevant assessment year." 20. Similar stand has also been taken by a Division Bench of the Allahabad High Court in the case of Daujee Abhushan Bhandar Pvt. Ltd. vs. 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 p....
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....said letter so produced before us dated 24/02/2022 and in view of the admission by the counsel for respondents, we have no hesitation to hold that the impugned notice is bad in the eye of law, contained in Annexure P/1 dated 31/03/2021 (received by the petitioner on 16/04/2021 through Email) inasmuch as after 1/04/2021, it is mandatory requirement that prior to re-assessment proceedings notice under section 148-A of Income Tax Act, 1961 should be issued to assesseee. Since now in view of the admission by the respondents the other reliefs as sought for by the petitioner in the relief clause have become redundant inasmuch as now there is no dispute about the date of issuance of the impugned notice. 7. Accordingly, the impugned 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 o....
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....n issued in an electronic form, the provisions of section 2(1)(t), section 3, section 13, section 66A of the Act of 2000 would be relevant as the same govern electronic communication. In the present case, as per section 13 of the Act of 2000, the Income Tax Business Application system should be considered as the "originator". Therefore, the despatch of electronic record would occur only when the same enters a computer resource outside the control of the Income Tax Business Application and only after such despatch would the notice be deemed to have been issued. 16.7. The e-filing portal as viewed by the assessee clearly highlights the fact that there is a system in place for duly displaying the date on which the notice is "issued" by the jurisdictional Assessing Officer. 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 referen....
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....ed in the e-filing portal accessed by the 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 the Income Tax Business Application servers before March 31, 2021, the respondents have readily furnished the said information in their counter affidavits as is evidenced by the counter filed in W. P. (C) No. 3038 of 2022, titled as Sant Sandesh Media and Communication P. Ltd. v. ITO. However, in the petitions where the e-mail was triggered on April 1, 2021, or thereafter, the said information has been withheld and an untenable submission has been made by the respondents, that the notice is deemed to have been issued on mere generation of the notice on the Income Tax Business Application screen. .. .. .. .. ... . 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 the impugned notices have been posted or the date and time on which the e-mail was sent from the e-mail ....
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.... 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 Income Tax Business Application software system is April 1, 2021, or thereafter, as the software is also programmed to record the date of issuance as the date of despatch. ......... ........ . 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. ... .... ... 21.4. To demonstrate the 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 t....
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....r,- (a) if it was sent by the originator himself ; (b) by a person who had the authority to act on behalf of the originator in respect of that electronic record ; or (c) by an information system programmed by or on behalf of the originator to operate automatically. . ." 26.7. In the present case, the "originator", as per section 2 (za) of the Act of 2000, is indubitably the Department. The same is confirmed by the contents of the compliance affidavit. As stated in the compliance affidavit, the jurisdictional Assessing Officer is the Income-tax authority designated by the Department to generate and sign the section 148 notice on behalf of the Department. The Income Tax Business Application portal is an information system programmed by TCS for the Department to operate automatically. The Income Tax Business Application portal is the computer resource designated by the Department for (a) drafting the e-mail to which the notice 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 jurisdictional Asse....
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....the intermediary. It thereafter, finally reaches the recipient. In the case on hand, the Department's e-mail service is the Income Tax Business Application e-mail software system and the assessee's e-mail service is G-mail, Outlook, etc. The Income Tax Business Application e-mail software uses dedicated servers for transmitting e-mails and therefore the e-mail is despatched when the same leaves the Income Tax Business Application 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 Income Tax Business Application 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 message transfer agents, i. e., server of the Income Ta....
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.... 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 jurisdictional Assessing Officers to determine the date and time when the assessees viewed the notices in the e-filing portal, as recorded in the Income Tax Business Application 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 April 1, 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 jurisdictional Assessing Officers 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 despatch and consider the same as date of issuance. If the date and time of despatch reco....