The Allahabad High Court has significiently observed that mere digitally signing doesn't amount to 'Issuance of Notice' under Section 148 of the Income Tax Act.
The Division Bench comprising of Justice Surya Prakash Kesarwani and Justice Jayant Banerji clarified that Notice needs to be sent/dispatched to the income tax assessee through paper or electronic devices and when it is so sent, that day would be considered as the date of issuance of Notice.
Brief Facts of the Case
The petitioner herein had challenged the IT Dept Notice under Section 148 of the Act, 1961 for the Assessment Year 2013-14 being time-barred. It was contended on his part that though the Notice was digitally signed by the Assessing Authority on March 31, 2021, it was sent through e-mail which was subsequently received by him on April 6, 2021.
In view of the above, he averred that the impugned Notice is time-barred and without jurisdiction as it was issued on April 6, 2021, whereas the limitation for issuing notice under Section 148 read with Section 149 of the Act 1961 expired on March 3, 2021.
Learned Counsel for the petitioner submitted that digitally signing a Notice is an act different from the act of issuing the notice. Section 149 provides limitation for issuance of the notice under section 148. When the notice has been issued to the petitioner by the Assessing Authority beyond the period of limitation i.e. after. 31.03.2021, therefore, the notice is time barred and no proceeding can be carried by the Assessing Authority pursuant to the impugned notice under Section 148 of the Act, 1961., he contended.
He referred the provisions of Sections 148, 149, 282(1)(c) and 282 A of the Act, 1961 and Rule 127 A of the Income Tax Rules 1962 and some definition clauses, Sections 3 and 13 of the Information Technology Act, 2000 and relied judgment of Gujrat High Court in Kanubhai M. Patel (HUF) v. Hiren Bhatt or His Successors to Office (2011) 12 taxmann.com 198 (Guj.) and judgment of present court in Smt. Kusum Agarwal Vs. Asst. Commissioner Of Income Tax, Agra And Another.
On the other hand, Learned Counsel for the Income Tax Department submitted that issue of notice means, the date on which the notice is digitally signed by the Assessing Authority. Since the impugned notice under Section 148 of the Act, 1961 has been signed by the Assessing Authority on 31.03.2021 i.e. well within the period of limitation, therefore, the impugned notice is wholly valid and the writ petition is not maintainable.
He relied on SC judgement in R.K.Upadhyaya Vs. Shanabhai P. Patel, 1987 Latest Caselaw 133 SC,
High Court's Analysis
The Court decided on the following questions while adjudicating the matter:
(i) Whether digitally signing notice would automatically amount to issuance of notice ?
(ii) Whether digitally signing a notice and issuing it are two different acts ?
(iii) Whether issuance of notice shall take place on the date and time when it is dispatched either electronically or through other mode ?
(iv) Whether merely generating notice from the Departmental Portal on 31.3.2021 and digitally signing it thereafter, would amount to issuance of notice ?
The Court noted that Sub Section (1) of Section 149 starts with prohibitory words that “no notice under Section 148 shall be issued for the relevant Assessment Year after expiry of the period as provided in sub Clauses (a) (b) and (c)” which makes it an undisputed that the notice must be issued by the Assessing Authority within the period of limitation as provided in Section 149 of the Act, 1961.
In furtherance, the Court while analysing mode of service of notices as prescribed under Section 282 of the Act, 1961, held that signing of notice and issuance or communication thereof have been recognised as different acts.
"Section 282 A provides for authentication of Notices and other documents by signing it. Sub- Section 1 of Section 282 A uses the word “ “Signed” and “issued in paper form” “ or “communicated in electronic form by that authority in accordance with such procedure as may be prescribed”.
It added that issuance of notice and other document would take place when the email is issued from the designated e-mail address of the concerned income tax authority.
"Rule 127 A(1) of the Rules 1962 provides that every notice or other document communicated in electronic form by an authority under the Act shall be deemed to be authenticated in case of electronic mail or electronic mail message (e-mail) if the name and office of such income tax authority is printed on the e-mail body, if the notice or other document is in the e7 mail body itself, or is printed on the attachment to the e-mail, if the notice or other document is in the attachment and the e-mail, is issued from the designated e-mail address of such income tax authority."
The Court conclusively held that 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.
"After digitally signing the notice the income tax authority has to issue it to the assessee either in paper form or through electronic mail. Sub-Section (1) of Section 13 of the Act 2000 provides that dispatch of an electronic record occurs when it enters a computer resource outside the control of the originator. The aforesaid sub Section (1) of Section 13 indicates the point of time of issuance of notice."
“Issue” and “Issuance of Notice”
The words “issue” or “issuance of notice” have not been defined under the Act 1961. However, the point of time of issuance of notice may be gathered from the provisions of the Act, 1961, the Rules, 1962 and the Act, 2000, as discussed above. Similar would be the position if the meaning of the word “issue” may be gathered in common parlance or as per dictionary meaning, the Court enunciated.
The Court referred to various dictionries and slew of judgements wherein the meaning of the word “issue” has been explained including SC rulings in Delhi Development Authority Vs. H.C. Khurana), 1993 Latest Caselaw 194 SC, The Government of Andhra Pradesh and Others Vs. Ch. Gandhi, 2013 Latest Caselaw 145 SC,
Considering the provisions of Section 282 and 282 A of the Act, 1961 and the provisions of Section 13 of the Act, 2000 and meaning of the word “issue”, the Court found that firstly notice shall be signed by the assessing authority and then it has to be issued either in paper form or be communicated in electronic form by delivering or transmitting the copy thereof to the person therein named by modes provided in section 282 which includes transmitting in the form of electronic record. Section13(1) of the Act, 2000 provides that unless otherwise agreed, the dispatch of an electronic record occurs when it enters into computer resources outside the control of the originator.
"The point of time when a digitally signed notice in the form of electronic record is entered in computer resources outside the control of the originator i.e. the assessing authority that shall the date and time of issuance of notice under section 148 read with Section 149 of the Act, 1961."
The Court set aside the impugned Notice accordingly.
Read Judgement Here:
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