TaxTMI 
TaxTMI 
2026 (1) TMI 813
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....mmissioner of Income-Tax (Appeals)/NFAC erred in disallowing the grounds of the Appellant both -on facts of the case and in Law. 2. The Ld. Commissioner of Income-tax (Appeals)/NFAC ought to have noticed that the notice u/s 148 of the old law having been issued on 01.04.2021, the entire assessment proceedings consequent to such notice are bad in law in the light of the decision of the Apex Court in the Ashish Agarwal (444 ITR 1). 3. The Ld. Commissioner of Income-tax (Appeals)/NFAC erred rejecting the legal grounds raised by the Appellant w.r.t. initiation of reassessment proceeding without following due procedure prescribed under the statute. 4. The NFAC ought to have appreciated that the Assessing Officer had not recorded proper satisfaction and further initiated reassessment proceedings under the old law beyond the period of six years. from the end of the relevant assessment year and therefore the assessee not only suffers from lack of jurisdiction but also passed in violation of principles of natural justice. 5. The Ld. Commissioner(Appeals)/NFAC erred in confirming the arbitrary addition of Rs. 2,06,60,990/- made by the Assessing Officer ref....
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....was served upon the assessee. The Ld. AR pointed out that the said email clearly reflects the time of delivery as 03:53 AM on 01.04.2021. On the basis of this documentary evidence, it was contended that the notice under section 148 of the Act was issued by the Revenue only on 01.04.2021. It was further submitted that by the Finance Act, 2021, the entire scheme of reassessment was substituted with effect from 01.04.2021, and from that date onwards, the Ld. AO is mandatorily required to follow the procedure prescribed under section 148A of the Act prior to issuance of a notice under section 148. In the present case, it was contended that no procedure as prescribed under section 148A of the Act was followed before issuing the notice under section 148 of the Act. Therefore, the notice issued under section 148 of the Act is invalid in law and the assessment framed pursuant thereto is liable to be quashed. In support of the above submissions, reliance was placed on the judgment of the Hon'ble Telangana High Court in the case of Kalyan Chillara v. DCIT, reported in 167 taxmann.com 500 (order dated 14.06.2024), wherein, under similar facts, the notice issued under section 148 of the Act wi....
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....otice reflects the date and time of sending as 01.04.2021 at 03:53:49 AM, the notice had already been generated and dispatched on the portal on 31.03.2021. According to the Revenue, due to congestion and technical constraints in the electronic network, the email communication of the notice was delivered to the assessee only on 01.04.2021. It was thus contended that for all practical purposes, the notice ought to be treated as having been issued on 31.03.2021, and therefore, the reassessment proceedings would be governed by the law prevailing prior to 01.04.2021. 9. We are unable to accept the aforesaid contention of the Revenue. On perusal of the above e-mail communication by the revenue, we find that the time of sending of the email is clearly mentioned as 03:53:49 AM on 01.04.2021, and the time of delivery is mentioned as 03:53:52 AM on 01.04.2021. This electronic trail constitutes a contemporaneous record of the actual communication of the notice to the assessee. We find that the precise argument advanced by the Revenue, that mere generation or dispatch of the notice on the Income-tax portal on 31.03.2021 should be treated as issuance, notwithstanding its communication on 01.....
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....been attributed the meaning, to send out; to place in the hands of the proper officer for service. The expression "shall be issued" as used in section 149 would therefore have to be read in the aforesaid context. In the present case, the impugned notices have been signed on 31.03.2010, whereas the same were sent to the speed post centre for booking only on 07.04.2010. Considering the definition of the word issue, it is apparent that merely signing the notices on 31.03.2010, cannot be equated with issuance of notice as contemplated under Section 149 of the Act. The date of issue would be the date on which the same were handed over for service to the proper officer which in the facts of the present case 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 no....
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....e the control of the originator. The aforesaid sub Section (1) of Section 13 indicates the point of time of issuance of notice. Therefore, after a notice is digitally signed and when it is entered by the income tax authority in computer resource outside his control i.e. the control of the originator then that point of time would be the time of issuance of notice." 21. Further, a Division Bench of the Madhya Pradesh High Court in the case of Yuvraj vs. Income-Tax Officer and others 9 held at paragraph Nos.4 to 7 as under, viz., "4. The aforesaid newly inserted section 148-A now specifically provides for issuance of a notice if the Assessing Officer takes a decision to initiate reassessment and therefore, a procedure has been laid down under section 148- A which is required to be adhered to by the Assessing Officer after 1/04/2021 i.e. the date on which the Finance Act, 2021 came into force. 5. The counsel for the parties were heard and during the course of hearing, the counsel for respondent/revenue Shri Sanjay Lal produced a letter dated 24/02/2022 bearing no. 1002 issued by Income Tax Officer - 3 (1) of Bhopal which was addressed to the counsel for the r....
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.... 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 or his successors to office [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 "Income Tax Business Application portal" under section 149 of the Act of 1961. The time taken by the Income Tax Business Application software for triggering of e-mail is attributable to the Assessing Officer and since admittedly the impugned notices were despatched on April 1, 2021, or thereafter, the same are time barred. 16.4. The E-verification Scheme, 2021 issued by Central Board of Direct Taxes vide Notification bearing No. 137 of 2021, dated December 13, 2021 ([2022] 440 ITR (St.) 9 ) in paras 6, 9 and 11, states that affixation of digital signature certificate in e-proceedings PSK,J & NTR,J wp_18098_2022&batch is a mandatory requirement. In the absenc....
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....this regard reliance has been placed on the judgment of the Supreme Court in Union of India v. 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." ... .... .... .. 17.1. The details of the date and time of despatch of the impugned notices by the Income Tax Business Application servers are available with the respondent. In the case of Santosh Krishna HUF v. Union of India [2022] 449 ITR 457 (All), bearing Writ Tax No. 211 of 2022 and Mohan Lal Santwani v. Union of India [2022] 449 ITR 476 (All) 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 the jurisdictional Assessing Officer, and (3) triggering of e- mail to the assessee. Further, the Allahabad High Court in Mohan Lal Santwani (supra) has directed that the date and time of triggering e- mail should be reflected in the e-filing portal accessed by the assessee. Therefore, in the present cases, the aforesaid information, even though av....
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....tices issued subsequently in 2021, to the same assessee, the date of issuance is duly mentioned along with the communication reference ID on the e-filing portal. Relevant portion of the screen shot is extracted hereinbelow : 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 authorit....
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....rred ? .... .... ... 26.6. Further, section 11 of the Act of 2000 is also of relevance : "11. Attribution of electronic records.--An electronic record shall be attributed to the originator,-- (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 PSK,J & NTR,J wp_18098_2022&batch 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-mai....
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....rs, the e- mail reaches the destination message transfer agents, i. e., server of the recipient's e-mail service. In case the recipient is using an intermediary server, it reaches the intermediary message transfer agents, i. e., server of 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 email 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 tran....
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....iness Application portal in accordance with the law laid down in this judgment as the date of issuance. If the date and time of despatch recorded is on or after April 1, 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 assessee's without any real time alert, are disposed of with the direction to the jurisdictional Assessing Officers to determine the date and time when the assessee's 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 PSK,J & NTR,J wp_18098_2022&batch 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 despatche....
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.... on 01.04.2021, being the date and time reflected in the email communication sent to the assessee. 11. Once it is held that the notice under section 148 was issued on 01.04.2021, the reassessment proceedings are governed by the substituted reassessment regime introduced by the Finance Act, 2021, with effect from that date, as held by the hon'ble Telangana High Court at para no. 17 of the order. Under the said regime, compliance with the mandatory procedure prescribed under section 148A of the Act is a condition precedent for issuance of a notice under section 148 of the Act. In the present case, it is an admitted position that the Ld. A.O. has not followed the procedure prescribed under section 148A of the Act prior to issuance of the notice under section 148 of the Act. Consequently, the notice issued under section 148 of the Act is void ab initio, and the assessment framed on the basis of such invalid notice cannot be sustained. 12. In view of the foregoing discussion, grounds nos. 2 and 3 raised by the assessee are allowed, and the assessment order passed under section 147 read with sections 144 and 144B of the Act dated 29.03.2022 is hereby quashed. 13. Since the appea....
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....ed 18.07.2025. On the basis of the above decisions, the Ld. DR submitted that the delay deserves to be dismissed. 17. We have carefully considered the rival submissions and perused the material available on record including case laws relied upon. On examination of the judicial precedents relied upon by the Ld. DR, we find that in all those cases, the courts had not condoned the delay due to the reason that there was no sufficient cause for the delay. However, the facts of the present case are clearly distinguishable. In the present case, the delay has occurred due to the assessee's inability to understand the appellate order communicated through email, coupled with his ill health and old age-related ailments during the relevant period. The explanation offered by the assessee is supported by an affidavit and, in our considered view, reflects a bona fide and reasonable cause. We find that the delay is short and marginal, being only 26 days, and there is nothing on record to suggest that the assessee acted with mala fide intention or deliberate negligence. In this context, we find guidance from the judgment of the Hon'ble Supreme Court in Vidya Shankar Jaiswal Vs. CIT 174 taxman....
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.... were not declared in the return of income or remined undisclosed. 7. The NFAC erred in confirming the order passed by the AO since neither the AO nor the NFAC provided clarity on what are the specific evidences or documents that they were looking for to satisfy themselves that the transactions were genuine and the entire cash deposits formed a part of Appellant's turnover which was already declared in its return of income. 8. The NFAC erred in confirming the order passed by the AO wherein NFAC did not provide proper reasons for relying on the conjectural conclusions drawn by the assessing officer. 9. The NFAC erred in confirming the order passed by the AO wherein the auditor's report was considered incorrect only due to a typographical error and hence the entire audited accounts could not have been rejected without bringing on record any other material/evidence. 10. The NFAC erred in referring to judicial decisions which are not applicable to the facts of the present case and without appreciating the merits of the case and the documentary evidence is placed on record. 11.The NFAC erred in confirming the addition of the AO wherein the ca....
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....he dispatched email placed at page no.13 of the paper book, which is to the following effect : 23. On perusal of the above, we find that the copy of the dispatched email does not reflect either the date or the time of sending of the email to the assessee. Thus, the document relied upon by the Revenue does not conclusively establish that the notice was issued or communicated prior to 01.04.2021. On the other hand, we have gone through the screenshot of the Income-tax portal placed at page no. 2 of the paper book filed by the assessee, which is to the following effect : 24. On perusal of above, we find that on the Income Tax portal of the assessee, it has been specifically mentioned that the notice under section 148 of the Act was issued on 01.04.2021. We also note that in ITA No. 589/Hyd/2024, the date of dispatch of the notice as per the ITBA portal relied upon by the Revenue was shown as 31.03.2021, whereas the date and time of sending of the notice, as reflected in the email communication placed on record, was 01.04.2021. Thus, even in that case, there was a clear distinction between the date of dispatch as per the portal and the date of actual communication of the notice t....
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....ils marked as 'Email Sent' are triggered from System and delivery status is awaited. View/Enter Dispatch Details Service Option to add Date of Dispatch or Date of PANITAN Date of Issue * Menu Search Criteria ZWIBA ~ Assessment INCOME TAX BUSINESS APPLICATION Assessment Home Page Dispatch Date once entered and saved will not be allowed to change If there are Multiple attachments, then please Zip them and attach. Worklist Worklist 30/03/2021 Dispatch MIS Reports Email Delivered Assessment Proceeding O Service Help A- A A+ FAQS Case History/Notings v Module * Date Of Dispatch Dato Name(Contains) View/Enter Dispatch Details Search Save Dispatch Details From ASSESSMENT Roso Te € Document Number Mode Select Proceed Welcome MD RAQUEEB AZAM , WARD 9(1), HYDERABAD , AO Logout From To v ITBA Home Document 2 Hynexove- A ....... /NTBA ~Assessment INCOME TAX BUSINESS APPLICATION A- A A+ Welcome VENUGOPAL RAO NEMALIKANTI, WARD 9(1),HYDERABAD , AO Logout ITBA Home Menu Worklist MIS Reports Help FAQS Assessment Home Page Worklis....
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....f Dispatch Date of Dispatch Date of Service Status Rema 1 31032100224 31/03/2021 AAGFD1940C [email protected] Noice u's 148 ITBA/AST/S/148/2020- 21/1032062330(1) Attachments Ema v 31/03/2021 Dispatched v 2 31032100225 31/03/2021 AAGFD1940C DESU ENTERPRISES Noice u's 148 ITBA/AST/S/148/2020- 21/1032052330(1) Attachments Email 31/03/2021 Dispatched v 3 31032100000 31/03/2021 AAGFD1940C DESU ENTERPRISES Prist Approval ITBAVAST/S/118/2020- 21/1032026156(1) Attachments Email 31/00/2021 Dispatched v Emails marked as 'Email Sent' are triggered from System and delivery status is awaited. View/Enter Dispatch Details Option to add Date of Dispatch or Date of Service Date of Issue *** Status " -Search Criteria Home View/Enter Dispatchi Details If there are Multiple attachments, then please Zip them and attach. Dispatch Date once entered and saved wil not be alowed to change 01/03/2021 O Dispatch O Service Dispatched AAGFD1940C : 20/04/2021 Name(Contains) Date Of Dispatch Module - Dat -11- " Certified Copy"1 Search From K. Swarne Latte के. सà¥à¤µà¤°à¥à¤£ लतà¤....