TaxTMI 
TaxTMI 
2026 (7) TMI 984
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....tion, having regard to the provisions contained in Section 73(10) of the said Act. 2. To answer the above issue, it is necessary to note down the facts leading to the filing of the instant writ petition. Pursuant to a show cause issued under Section 73(1) of the said Act in respect of the tax period April, 2018 to March, 2019 on 20th December, 2023, a final order under Section 73(9) of the said Act, was digitally signed on 30th April, 2024. The same was uploaded on the portal in form DRC 07 on 1st May, 2024. Being aggrieved, the petitioners preferred an appeal under the provisions of Section 107 of the said Act by making payment of the pre-deposit as is required for maintaining such appeal. The said appeal was disposed of on contest by varying the demand raised in DRC 07. Consequent upon the disposal of the appeal vide order dated 28th February, 2024, a fresh demand in form APL 04 has been issued. The writ petitioners, in the present writ petition does not question the merits of the appeal but has confined the challenge to the competence of the proper officer to pass and upload the order under Section 73(9), beyond the extended time prescribed. 3. Mr. Kanodia, learned advocat....
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....o. 1286 of 2025, neutral citation 2025:AHC:229995-DB. He has also relied on an unreported judgment delivered by the Division Bench of this Court in the case of The Assistant Commissioner of Income Tax Circle 13(1) Kolkata v. Radhakrishna Bimalkumar Pvt. Ltd., in AOPT 231 of 2023 on 26th September, 2023, and as also on a judgement delivered by the Coordinate Bench of this Court in the case of Messers Sreema Rice Mill v. Union of India & Ors., in WPA 11892 of 2024. Having regard thereto, he submits that since the adjudication order in this case was not served on the petitioners, the same cannot be enforced specifically on the ground that for an issuance of an order to be complete, the same not only should be signed but also should be set in a motion for the same to be delivered to the tax payer. 5. Mr. Siddiqui, learned AGP and senior advocate on the other hand has drawn the attention of this Court to the order passed under Section 73(9) of the said Act and would submit that the said order has in fact been digitally signed by the proper officer on 30th April, 2024 at around 21:15:13 hrs. He would submit that since, in terms of the notification issued under Section 168A of the s....
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....used as interchangeable terms as per the legislative practices of the country, these words are intended to convey the same meaning, however, having regard to the observations made in the later judgment of R.K. Upadhyay v. Shanabhai P. Patel, reported in (1987) 3 SCC wherein the Hon'ble Supreme Court while noticing the scheme of the Income Tax Act 1961 (in short, the "1961 Act") was of the view that the 'service' under the scheme of the new Act was not a condition precedent to conferment of jurisdiction on the Income Tax Officer (ITO) and that issuance of the notice by the ITO within the period of limitation was sufficient to vest the ITO with the power to make an order of assessment and that the requirement of issue of notice is satisfied when the notice is actually issued. 7. This Court had, however, taken the assistance of Mr. Mehta, learned senior advocate, who was appointed as an amicus curie. The amicus curiae has highlighted the scope of Section 73 and has elucidated on the expression 'issue' as appearing in the sub-sections of Section 73. He has also drawn attention of this Court to the scope of Section 169 of the said Act which provides the manner in which service is to ....
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....credit wrongly availed or utilised for any reason other than fraud or any willful-misstatement or suppression of facts.- (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. (2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under subsection (1), the proper officer may serve a statement, containing the details of tax no....
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.... (11) Notwithstanding anything contained in sub-section (6) or subsection (8), penalty under sub-section (9) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax. [(12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.] 9. As would appear from the above, Section 73(1) of the said Act provides that where it appears to the proper officer that tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or wilful-misstatement or suppression of facts to evade tax, he shall serve a notice on the person chargeable with tax which has not been paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause. As such having regard to Section 73(1) of the said Act, no order under Section 73(9) of the said Act can be passed without a show-cause. Sub-section (2) of Secti....
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....e same, the said section is extracted hereinbelow: 169. Service of notice in certain circumstances.-(1) Any decision, order, summons, notice or other communication under this Act or the rules made thereunder shall be served by any one of the following methods, namely:- (a) by giving or tendering it directly or by a messenger including a courier to the addressee or the taxable person or to his manager or authorised representative or an advocate or a tax practitioner holding authority to appear in the proceedings on behalf of the taxable person or to a person regularly employed by him in connection with the business, or to any adult member of family residing with the taxable person; or (b) by registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorised representative, if any, at his last known place of business or residence; or (c) by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or (d) by making it available on the common portal; or (e) by publication in a newspaper circulating in the locality in whi....
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....ance on the aforesaid has attempted to make out a case that the words "issue" and "service" are interchangeably used and mean one and the same, however, I find that the legislature has used the words "issue" and "service" distinctly having regard to the nature of its requirement in the various sub-sections of the Section 73 while also providing for the manner in which such a notice and order is required to be served as provided for in Section 169 and under Rule 142 of the said Rules. As has been pointed out by the amicus curiae, the term "service" and "issue" have different connotations. Ordinarily, issue of a notice or order means to formally make it out of the authority's hands by signing, dating and sending the documents for dispatch and completion of secretarial practice. However, the term "service" includes not only issuance of an order but also the effective means taken to deliver or communicate the same to the person intended by legally prescribed modes. As noted above, the mode of service is provided under Section 169 and it deals with term "service" and not the term "issue". The term "issue" only finds place amongst other relevant sections in Section 73 of the said Act and....
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....the jurisdiction. In the present case, under the said Act, the legislature has departed from the previous position and has not used the expression "serve" in Section 73(2), (9) and (10) of the said Act, instead has used the expression "issue". The mode of service has, however, been shelved to a completely different section, which is Section 169. In this context, it may be relevant to place reliance on the judgment delivered in the case of Banarasi Debi (supra), which dealt with the notice issued under the Income Tax Act, 1922. In the 1922 Act under Section 34(1)(b), the officer is obliged to serve a necessary notice within 4 years which is very similar to the provision under the Finance Act, 1994 and the Central Excise Act, 1994. 13. In this context, it may be noted that the Hon'ble Delhi High Court in the case of Mayawati v. Commissioner of Income Tax and Ors., reported in [2010] 321 ITR 349, considering the distinction between the term "issue of notice" and the term "service of notice" has held that it is not necessary that a notice should be served within prescribed period which is for the issuing of the notice. 14. I find that the amicus curie has also elucidated on the a....
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....ession in an Act which was introduced by repealing the Finance Act, 1994 and the Central Excise Act, 1944 and where in both the previous Acts, only the limitation period was interlinked with the term "service" which has intentionally been omitted by the legislature, the arguments advanced by ignoring such omission, in my view, cannot be the correct interpretation of the term "issue" and "service". In this context, I may also note that Mr. Kanodia placed strong reliance on the judgment delivered pertaining to issue of notice under Section 148 of the 1961 Act. To understand the scope of issuance of notice under Section 148 of the 1961 Act, it must be noted that on the issuance of a notice under Section 148 of the 1961 Act, reassessment proceedings do not take place. Section 149 of the 1961 Act, however, creates a specific bar in issuing a notice unless, such notice is within the time specified therein; while reassessment is done under section 147 of the 1961 Act. I find that the Division Bench of this Court while considering the scope and effect of issuance of a notice under Section 148 of the 1961 Act, in the judgment delivered in the case of Assistant Commissioner of Income Tax, Ci....
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.... 147(b) of the Act applies. The two relevant provisions are in Sections 148 and 149 of the Act which provide: 148. (1) Before making the assessment, reassessment or recomputation under Section 147, the Income Tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 139; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section. (emphasis supplied) (2)*** 149. (1) No notice under Section 148 shall be issued, (a)*** (b) in cases falling under clause (b) of Section 147, at any time after the expiry of four years from the end of the relevant assessment year. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of Section 151." The High Court relied upon the decision of this Court in the case of Banarsi Debi v. ITO [AIR 1964 SC 1742 : (1964) 7 SCR 539 : 53 ITR 100] where the validity of a notice under Section 34(1) of the Income Tax Act, 1922 and the scope of Section 4 of the Income Tax (Amendmen....
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....nt of jurisdiction in the Income Tax Officer to deal with the matter but it is a condition precedent to making of the order of assessment. The High Court in our opinion lost sight of the distinction and under a wrong basis felt bound by the judgment in Banarsi Debi v. ITO [AIR 1964 SC 1742 : (1964) 7 SCR 539 : 53 ITR 100]. As the Income Tax Officer had issued notice within limitations, the appeal is allowed and the order of the High Court is vacated. The Income Tax Officer shall now proceed to complete the assessment after complying with the requirements of law. Since there has been no appearance on behalf of the respondents, we make no orders for costs." 16. The factum of issuance of a notice under Section 148 of the 1961 Act is sufficient to attract the jurisdiction, though the requirement of Section 148 to make reassessment is to serve the notice, for which no limitation has been provided, as has been reiterated in the case of Mayawati (supra). 17. Independent of the above, I also find that both, the learned advocates for the petitioners as also for the respondents have placed much reliance on the method of authentication of an order issued under the said Act. In this cont....
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....o be communicated. Since, the provision of limitation has been attached to the issuance of a show-cause notice under Section 73(1) and an order under Section 73(9) of the said Act, without providing for limitation in the manner of service of such order, in my view, the petitioners cannot be permitted to impeach the order on the ground that the order though was issued within the period of limitation was served after the statutory period for making the orders. If the statute does not mandate for service of an order within the period of limitation, the same cannot, in my view, be treated to be a mandate for service of the order within the period of limitation, especially when, the legislature while repealing the previous amendment has moved forward and chosen to make a distinction between the words, "issue" and "service". The judgments relied on by Mr. Kanodia in the case of Daujee Abhushan Bhandar Pvt. Ltd. (supra) deals with the notice under Section 148 of the 1961 Act. While deciding such matter, their Lordships did not consider the provisions of the Finance Act 1994, the Central Exercise Act and the said Act. Similar Consideration applies for the case of Kundan Lal Behari Lal (sup....