Telangana High Court
Kalyan Chillara vs Deputy Commissioner Of Income Tax And 2 ... on 14 June, 2024
Author: P.Sam Koshy
Bench: P.Sam Koshy, N.Tukaramji
IN THE HIGH COURT FOR THE STATE OF TELANGANA:
HYDERABAD
***
Writ Petition Nos.18098, 14302, 14331, 19083, 20301, 20925,
20935, 21181, 21805, 21949 and 22543 of 2022
Between:
The State of Andhra Pradesh and Others.
Petitioners
VERSUS
M/s.Himani Limited and Others.
Respondents
COMMON ORDER PRONOUNCED ON: 14.06.2024
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE N.TUKARAMJI
1. Whether Reporters of Local newspapers
may be allowed to see the Judgments? : Yes
2. Whether the copies of judgment may be
marked to Law Reporters/Journals? : Yes
3. Whether His Lordship wishes to
see the fair copy of the Judgment? : Yes
__________________
P.SAM KOSHY, J
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* THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE N.TUKARAMJI
+ Writ Petition Nos.18098, 14302, 14331, 19083, 20301, 20925,
20935, 21181, 21805, 21949 and 22543 of 2022
% 14.06.2024
# Between:
Kalyan Chillara, S/o.Kotaiah Naidu and others.
petitioners
VERSUS
Deputy Commissioner of Income Tax,
Central Circle - 1 (3), Hyderabad and others.
Respondents
! Counsel for Petitioner(s) : Mr.Dundu Manmohan, learned counsel for the
petitioners in W.P.Nos.18098, 14302, 14331,
20301 and 21182 of 2022;
Mr.Y. Ratnakar, learned Senior Counsel, in
W.P.Nos.20925 & 20935 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.
^Counsel for the Respondent(s) : Mr.J.V. Prasad, learned Senior Standing
Counsel for Income Tax, for the respondents.
<GIST:
> HEAD NOTE:
? Cases referred
1. (2022) 444 I.T.R. 1 (S.C.)
2. 1987 (166) I.T.R. 163
3. 2017 (392) I.T.R. 571 (D.B.)
4. [2022] 445 I.T.R. 651 (Mad)
5. 2011 (334) I.T.R. 25 (D.B.)
6. [2022] 449 I.T.R. 517 (Del.)
7. [2022] 446 I.T.R. 201 (Mad)
8. [2022] 444 I.T.R. 41 (All.)
9. (2022) 444 I.T.R. 329 (M.P.)
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THE HONOURABLE SRI JUSTICE P. SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE N. TUKARAMJI
Writ Petition Nos.18098, 14302, 14331, 19083, 20301, 20925,
20935, 21181, 21805, 21949 and 22543 of 2022
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 under Section 148 of the Act was
coming to an end on 31.03.2021. In majority of the cases, the notice
under challenge in the instant writ petitions is dated 31.03.2021,
however the notices have been issued from the office of the
respondent-Department either on 01.04.2021 or on subsequent dates.
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This is the bone of contention as regards whether the notice which is
issued itself on or after 01.04.2021 would be hit on the grounds of
limitation. Since the issue is common in all these writ petitions, this
Court is not referring to the actual dates in each of the notices.
3. Heard Mr.Dundu Manmohan, learned counsel for the petitioners
in Writ Petition Nos.18098, 14302, 14331, 20301 and 21181 of 2022;
Mr. Y. Ratnakar, learned Senior Counsel, appearing on behalf of the
the petitioners in Writ Petition Nos.20925 and 20935 of 2022;
Mr.A.V.A. Siva Kartikeya, learned counsel for the petitioner in Writ
Petition No.19083 of 2022; Mr. Vivek Reddy, learned Senior Counsel
appearing on behalf of Mr. Cuddapah Nanda Gopal, learned counsel
for the petitioners in Writ Petition Nos.21949 & 22543 of 2022; and
Mr. J.V. Prasad, learned Senior Standing Counsel for Income Tax, for
the respondents.
4. The real issue to be decided is whether it was legal, justified and
proper on the part of respondents in mere preparation of the notice
under Section 148 of the Act on 31.03.2021 and forwarding the same
for dispatch is sufficient to meet the requirement under Sections 148
and 149 or not. In other words, without proper effective dispatch and
service of notice as is required under Sections 148 and 149 of the Act
on or before 31.03.2021, whether the impugned notices in these batch
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of writ petitions would be sustainable or not. Alternatively, it is also
the case where it needs to be decided as to whether though the notice
is dated 31.03.2021, but the dispatch being made on 01.04.2021 or
thereafter from the I.T.B.A. portal would be sufficient so far as meeting
the period of limitation as is prescribed under Sections 148 and 149 of
the Act.
5. It was predominantly contended by almost all the counsel for the
petitioners that under the unamended provisions, a notice under
Section 148 by the jurisdictional officer had to be issued and served
on or before 31.03.2021. However, in case if the service of notice has
been done beyond 31.03.2021, i.e., on or after 01.04.2021, in terms of
the decision of the Hon'ble Apex Court in the case of Union of India
and others vs. Ashish Agarwal 1, 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.
1 (2022) 444 I.T.R. 1 (S.C.)
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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
also the date of service of the notice in the portal so that the same is
easily available with the respondents, as these notices are mostly sent
by e-mail which easily reflects the time of dispatch and the date and
time of delivery. The page in the portal would easily reflect the date
and time at the originator's place and the date and time at the
recipient's end. In case if the respondent is unable to produce records
in this regard, the contention of the respondents of treating the notice
dated 31.03.2021 as proper service of notice is not to be accepted as
'gospel truth'.
7. Though there are other grounds also raised and highlighted by
the learned counsel for the petitioners, we confine ourselves in
deciding this batch of writ petitions on the preliminary objection of
limitation first. In case if the ground of limitation raised by the
petitioners would sustain, there would not be any necessity for taking
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up the other grounds and issues as the entire notices and the
proceedings initiated under Section 148 would stand collapsed on the
ground of limitation.
8. On the other hand, learned Senior Standing Counsel for Income
Tax, appearing on behalf of the respondents, contended that for all
practical purposes the notices under Section 148 of the Act, the date
mentioned on it should be taken as the date of issuance of the notice.
It was his further contention that earlier there was a system in the
respondent-Department where after the notices were prepared and
signed it was sent for the dispatch which was to be sent by post and
therefore if any delay occurs it would be the date of dispatch which is
important. However, now because of the technological developments
notices are being sent electronically, the question of physical dispatch
no longer survives and that immediately after the Assessing Officer
signs the notice under Section 148 of the Act it is sent to the I.T.B.A.
Section which is authorized to send the mails.
9. According to learned Senior Standing Counsel for the
respondents, it so happens that since there are large number of
notices in the pipeline with the I.T.B.A. Department and which they
send it by mail, but because of the reason that there is too much
pressure upon the said Department, the notices are normally delayed
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more because of the network problem and not for any lapse or lacking
on the part of the respondent-Department. Hence, principally 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 2, 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 3, 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 and merely because there is
1987 (166) I.T.R. 163
3 2017 (392) I.T.R. 571 (D.B.)
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delay at the behest of the postal authorities, the date of issuance
would not get postponed.
12. Likewise, reliance was also placed by the learned Senior
Standing Counsel for the respondents on a judgment rendered by the
Madras High Court in the case of Malavika Enterprises vs. Central
Board of Direct Taxes and others 4, wherein the Madras High Court
also took the stand that date of issuance of notice is what matters and
not the date of service.
13. Further, the learned Senior Standing Counsel for the
respondents placed reliance on the judgment of the High Court of
Gujarat in the case of Kanubhai M. Patel vs. Hiren Bhatt 5,
contending that the moment the signature is appended on the notice
under Section 148 by the Assessing Officer and forwards the file, it is
officially put into circulation and that the concerned officer, i.e., the
Assessing Officer loses control over such notice and therefore it has to
be assumed that the date which is reflected on the notice is the date of
issuance also.
14. Even relying upon the judgment which is being relied upon by
the learned counsel for the petitioners also, i.e., the decision of the
Delhi High Court in the case of Suman Jeet Agarwal vs. Income-Tax
4 [2022] 445 I.T.R. 651 (Mad)
5 2011 (334) I.T.R. 25 (D.B.)
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Officer and others 6, the learned Senior Standing Counsel for the
respondents contended that the moment the Assessing Officer puts
his signature on the notice generated, the officer as such loses control
over the said notice and it goes further down to the I.T.B.A. portal for
dispatch which is equivalent to the role of a postal department, and
therefore, the act of generation of notice if it is within limitation would
also amount to issuance of notice within the time limit.
15. According to the learned Senior Standing Counsel for the
respondent-Department, the I.T.B.A. portal is to be equated with that
of the postal department. Once the notice generated by the Assessing
Officer reaches the I.T.B.A. Section, the Assessing Officer loses control
over the notice so generated. Thereafter it goes into the queue where
the technicians issue the notices in seriatim which often takes some
time. Therefore, the time when the Assessing Officer has put his
signature to the notice it has to be treated as 'issued'.
16. Upon hearing the learned counsel for the petitioners 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
6 [2022] 449 I.T.R. 517 (Del.)
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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
Court in the country, held that for any notice of re-assessment on or
after 01.04.2021 it would be the new amended law which would be
governing the field, as the un-amended provisions were valid only till
31.03.2021.
18. We leave that issue for the time being there itself.
19. It is necessary at this juncture to refer to the decision of the
Madras High Court in the case of Smt. Parveen Amin Bhathara vs.
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Income-Tax Officer 7, wherein the learned Division Bench at
paragraph No.12, after dealing with certain judicial precedents on the
issue, has held as under, viz.,
"12. .........
Thus, the expression 'to issue' in the context of issuance of
notices, writs and process, has 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 notices https://www.mhc.tn.gov.in/judis 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
7 [2022] 446 I.T.R. 201 (Mad)
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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."
Thus, it is apparent from the aforesaid decisions 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 8. 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 prescribed.
19. The communication in electronic form has been prescribed
in Rule 127 A of the Rules 1962 which provides a procedure for
issuance of every notice or other document and the e-mail in
[2022] 444 I.T.R. 41 (All.)
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electronic form/electronic mail which has to be issued from the
designated e-mail address of such income tax authority.
20. Thus, 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. 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 re- assessment 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 revenue and in the said letter it was stated that
(2022) 444 I.T.R. 329 (M.P.)
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though in the notice which was issued to the petitioner herein, the
date was mentioned as 31/03/2021 but, the system of the office of
the respondents revealed that the Email to the petitioner was in fact
sent on 16/04/2021. Thus, the counsel for respondent does not
dispute that the notice which is impugned in the petition contained in
Annexure P/1 in fact was issued on 16/04/2021 though the date on
the same was mentioned as 31/03/2021 but was issued later on
6/04/2021.
6. In view of the aforesaid 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 of Suman Jeet
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Agarwal (supra), has elaborately dealt with the said issue and held as
under, viz.,
"16.1. The expression "issued" has been judicially interpreted
by the courts as framing of the order and taking necessary action to
despatch the same. Therefore, mere generation of notice on the
Income Tax Business Application portal does not satisfy the test of
"issue" without proving that 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 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
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is a mandatory requirement. In the absence of digital signature
certificate, the impugned notices would be null and void.
16.5. The circular bearing No. 19 of 2019, dated August 14,
2019 ([2019] 416 ITR (St.) 140 ), issued by Central Board of Direct
Taxes mentions that the allotment of a document identification
number to the notice is a mandatory requirement prescribed by the
aforesaid circular only to maintain the audit trail of the documents
issued by the Department and to provide transparency in the process.
The allotment of document identification number to the notice does
not amount to issuance as sought to be contended by the Department
in these proceedings.
16.6. Since the impugned notices have been 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 :
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Notice/Communication
Reference ID :
100036566022
Notice u/s. Income Tax Business Description : (Income Tax
Application/AST/F/17/202122 Business Application) Issue
/1034161151(1) Document letter Submit Response
reference ID
Notice/Letter PDF
Issued on : 13-Jul-2021
Seek/View Adjournment
Notice/Communication
Reference ID :
100033602029
148 Notice u/s. Income Tax Business Description : (Income Tax
Application/AST/S/148/2020- Business Application)
21 /1032044808(1) Document Notice u/s. 148 View
reference ID response of Income-tax
Act, 1961.
Notice/Letter PDF
Issued on :
Seek/View Adjournment
16.8. A conjoint reading of the relevant provisions of the Act of 1961
and Act of 2000, leads to the inescapable conclusion that for the
notice to be validly "issued" it has to be digitally signed and should be
out of the control of the originator for satisfying the test of "shall be
issued" under section 149 of the Act of 1961.
16.9. The mere generation of notice on the Income Tax Business
Application 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 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."
... .... .... ..
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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 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
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on which the e- mail was sent from the e-mail ID of the jurisdictional
Assessing Officer. (CIT v. Chetan Gupta [2016] 382 ITR 613 (Delhi)).
18.2. All impugned notices sent by e-mail have been issued from the
designated e-mail address of the jurisdictional Assessing Officers,
therefore, to allege that the triggering of e-mail by the Income Tax
Business Application is separate from the jurisdictional Assessing
Officer is factually incorrect. The process of triggering e-mail by the
Income Tax Business Application software system is for and on behalf
of the jurisdictional Assessing Officer and therefore, attributable to
the jurisdictional Assessing Officer.
...... .... ... ..
9.1. The screenshot annexed as annexure P-5 in W. P. (C) No. 4567 of
2022 shows that each notice in addition to a document identification
number, also contains a communication reference ID ("CRI"). The
communication reference ID is generated by the Income Tax Business
Application portal to record the date of the issuance of the notice.
Although the communication reference ID for the impugned notices
issued under section 148 of the Act of 1961, is displayed on the e-
filing portal, the date of issuance is conspicuously absent.
Notice/Communication
Reference ID :
100040446529
142(2) Notice u/s. Income Tax Business Description : (Income Tax
Application/AST/F/142(1)/2 Business Application)
021-22/1037155946 (1) notice u/s. 142 View
Document reference ID response of Income-tax
Act 1961.
Notice/Letter PDF
Issued on : 23-Nov-2021
Response due date : 8-Dec- Seek/View Adjournment
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Notice/ Communication
Reference ID :
100033640093
148 Notice u/s. Income Tax Business Description : (Income Tax
Application/AST/S/148/2020- Business Application)
21/1032078906(1) Document notice u/s. 148 Submit
reference ID response of Income-tax
Act 1961.
Issued on :
Seek/View Adjournment
19.2. Per contra, another screenshot annexed as annexure P-3 in the
same writ petition, shows that in the case of other notices 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 authority to the assessee.
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... .... ...
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 the Income Tax Business
Application screen of the assessee as visible to the jurisdictional
Assessing Officer only. In this annexure, the Department itself has
extracted the relevant portion of the screenshot, which has complete
details of the time at which the e- mail was sent, time at which the e-
mail was delivered, etc. evidencing that the date and time when the
e-mail containing the impugned notice as an attachment was sent by
the Income Tax Business Application servers, is duly available with the
Department. The relevant extract of the screenshot is reproduced
hereinbelow :
Register Details
Despatc Date PAN/ Addresse Subject Comm. Ref. No. View Mode of Date of Date Status
h No. of e name docume despatch despatch of
issue nts servi
TAN
ce
31-3- AHIPG Anand Notice Income Tax Attachm E-mail E-mail
2021 3000F Goel u/s. 148 Business ents deliver
ed
Application/AST/S
/148/2020 -
21/103211/
6278(1)
Sent E-mail (?) E-mail delivery status E-mail sent on E-mail delivered on Shared with e-Proceeding on
E-mail details Delivered 01/04/2021 01/04/2021 03/04/2021
05 : 9 : 41 AM 05 : 29 : 45 AM 04 : 01 : 39 AM
... ... ... ... ..
23.1. The impugned notice issued by the respondent was not served
on the petitioner/assessee's registered e-mail ID and was sent to an
unrelated e-mail ID. The petitioner learnt about the impugned notice
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which was neither signed physically nor any digital signature
certificate was appended, incidentally through its e-filing portal.
Therefore, there has been no compliance of the provisions of section
149 of the Act of 1961, while issuing the impugned notice.
.........
23. Further, the Division Bench, while dealing with the notices and
reasons held as under, viz.,
25. Question No. (I) : Whether the jurisdictional Assessing Officer's act
of generating notice in the Income Tax Business Application portal on
March 31, 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 ?
.... .... ...
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
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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 Assessing Officer and Income Tax Business Application
perform two inseparable and complementing functions for the
Department, which together constitute generation of notice +
drafting of the e-mail by the Income Tax Business Application e-mail
software and its despatch through dedicated Income Tax Business
Application 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, Income Tax Business Application portal is the
"computer resource" under the control of the Department.
26.8. In the light of the aforesaid findings of this court, the
submissions made by Zoheb Hossain, learned senior standing counsel
for the Department, that the jurisdictional Assessing Officer and the
Income Tax Business Application are distinct and that the
jurisdictional Assessing Officer 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 Income Tax Business Application
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portal. Under section 13 of the Act of 2000, various High Courts have
concluded that the despatch of an electronic record occurs when it
enters a computer resource outside the control of the originator, i. e.,
when the Income Tax Business Application's e-mail system is
triggered and the e-mail leaves the Income Tax Business Application
servers. (Daujee Abhushan Bhandar (supra), Yuvraj (supra), Advance
Infradevelopers (P) Ltd. (supra)).
..... ... .... .
26.13. Typically, an e-mail service based on SMTP Model utilizes a
chain of servers to transmit e-mail from the sender to the recipient.
Once an e- mail is drafted and the sender presses the "send" button,
the e-mail service, i. e., the user agent ("UA") of the sender transmits
it to the message transfer agents ("MTAs"), i. e., servers of the
sender's e-mail service. Through a sequence of such message transfer
agents, i. e., servers, 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 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 :
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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 Tax
Business Application is a computer resource belonging to the
Department. As established earlier, the Department is the originator
as per section 11(c) of the Act of 2000, hence, the despatch occurs
when it leaves the last message transfer agents, server of the Income
Tax Business Application and enters a computer resource that the
Department does not have control over, i. e., the message transfer
agents server of the e-mail service that the assessee is using.
.... ... .... .
31. For the reasons and principles that we have laid down, we dispose
of these writ petitions with the following directions :
31.1. Category "A" : The notices falling under category "A", which
were digitally signed on or after April 1, 2021, are held to bear the
date on which the said notices were digitally signed and not March
31, 2021. The said petitions are disposed of with the direction that the
said notices are to be considered as show-cause notices under section
148A(b) of the Act as per the directions of the apex court in the Ashish
Agarwal, (supra) judgment.
31.2. Category "B" : The notices falling under category "B" which
were sent through the registered e-mail ID of the respective
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jurisdictional Assessing Officers, though not digitally signed are held
to be valid. The said petitions are disposed of with the direction to the
jurisdictional Assessing Officers to verify and determine the date and
time of its despatch as recorded in the Income Tax Business
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.
31.3. Category "C" : The petitions challenging notices falling under
category "C" which were digitally signed on March 31, 2021, are
disposed of with the direction to the jurisdictional Assessing Officers
to verify and determine the date and time of despatch as recorded in
the Income Tax
Business 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
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
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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 recorded is on or after April 1, 2021, the notices are to be
construed as show-cause notices under section 148A(b) as per the
directions of the apex court in the Ashish Agarwal (supra) judgment."
24. With the aforesaid judicial precedents and the fact that the Delhi
High Court has extensively dealt with these contentions (which have
also been the contention of the learned Senior Standing Counsel for
the Income Tax, for the respondents, in the present batch of writ
petitions), and rendered the judgment in favour of the assessee, and
which has not been further challenged by the respondent-Department
till now. Therefore, we also are fully in agreement and endorse the
views laid down by the Division Bench of the Delhi High Court in the
case of Suman Jeet Agarwal (supra) and hold that the impugned
notices in all these batch of writ petitions are barred by limitation
under Sections 148 and 149 of the Act, since the said notices have left
the I.T.B.A. portal on or after 01.04.2021.
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25. The objection raised by the learned counsel for the petitioners
that the impugned notices under challenge are barred by limitation is
sustained. Therefore, the impugned notices in all these writ petitions
are as a consequence set aside / quashed on the ground of it being
barred by limitation.
26. Accordingly, the Writ Petitions are allowed. No costs.
27. Consequently, miscellaneous applications pending if any in
these Writ Petitions, shall stand closed.
___________________
P. SAM KOSHY, J
___________________
N. TUKARAMJI, J
Date: 14.06.2024
L.R. copy to be marked : YES
B/o.
Ndr
