(a) if the addressee has designated a computer resource for
the purpose of receiving electronic records,-(i)receipt
occurs at the time when the electronic record enters
the designated computer resource; or(ii)if the
electronic record is sent to a computer resource of the
addressee that is not the designated computer resource,
receipt occurs at the time when the electronic record is
retrieved by the addressee;
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
(b) if the addressee has not designated a computer resource
along with specified timings, if any, receipt occurs when
the electronic record enters the computer resource of
the addressee."
14. The E-Assessment Scheme, 2019 placed reliance on Section
13 of the I.T. Act for the purpose of delivery of electronic record.
"15. In terms of sub-section (13) of Section 144C of the Act,
the AO is mandated to complete the assessment ―in
conformity with the directions as framed by the DRP. That
very provision commands the AO to complete the assessment
within one month from the end of the month in which such a
direction is received.
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
17. As is manifest from a reading of sub-section (13) of Section
144C of the Act, the AO is not accorded any discretion in the
framing of an order of assessment once directions have come
to be framed by the DRP. In fact, the provision requires the
AO to frame an order of assessment in conformity with those
directions and without providing any further opportunity of
hearing to the assessee. This principle of law has been
affirmed by the Bombay High Court in the aforenoted
paragraphs of Vodafone Idea and in Shell India Markets
Private Limited v. Additional Commissioner of Income Tax
Officer, National Faceless Assessment Centre & Ors10. The
relevant paragraph of the decision in Shell India are extracted
hereinbelow:
'10. Sub-section (13) of Section 144C, therefore, is very clear
inasmuch as the Assessing Officer shall, upon receipt of the
directions issued under sub-section (5), in conformity with the
directions, complete the assessment within one month from
the end of the month in which such direction is received. Sub-
section (13) also provides that the Assessing Officer can
complete the assessment without providing any further
opportunity of being heard to the assessee. This means that
the moment the Assessing Officer receives the directions under
sub-section (5), he has to straightaway complete the
assessment and he does not even have to hear the assessee.
The Assessing Officer shall simply comply with the directions
received from the DRP within one month from the end of the
month in which such direction is received.'
20. Undisputedly, the directive of the DRP came to be
uploaded on the ITBA portal on 24 June 2022. It is
additionally stated to have been dispatched through Speed
Post to the third respondent (TPO) and the fourth respondent
(Additional/Joint/Deputy/Assistant Commissioner of Income
Tax, National Faceless Assessment Centre, New Delhi) on 27
June 2022. It is thereafter that the TPO appears to have
passed the order dated 25 July 2022.
21. We, however note that paragraph 4(2) of the E-as, 2019
makes the following salient provisions:-
'4(2). All communication among the assessment unit, review unit,
verification unit or technical unit or with the assesse or any
other person with respect to the information or documents or
evidence or any other details, as may be necessary for the
purposes of making an assessment under this Scheme shall be
through the National e-assessment Centre.'
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
22. It is thus manifest that as per the provisions of E-as,
2019, all orders, notices and decisions have to be necessarily
uploaded on the ITBA portal and as part of the larger faceless
assessment regime which now holds the field. The uploading
of the directive of the DRP on the ITBA portal would thus
constitute valid and sufficient service and the period of
limitation as prescribed in Section 144C(13) of the Act would
be liable to be computed bearing that crucial date in mind.
Once the aforesaid position becomes clear, it is evident that
the order of assessment, if at all could have been framed lastly
by 31 July 2022. There has thus been an abject failure on the
part of the first respondent to comply with the mandatory
timelines as incorporated in the aforenoted provisions.
Accordingly, the writ petition is liable to be allowed and the
impugned order of assessment and the consequential penalty
proceedings are thus liable to be set aside on this short score
alone."
(Emphasis Supplied)
16. The Bombay High Court in Vodafone Idea Ltd. (supra)
opened as under:
"15. Annexed to the affidavit of Mr. Satish Sharma is a
screenshot of the CHN-Case History Notings of the Dispute
Resolution Panel proceedings uploaded on the Income-tax
Business Application portal. The screenshot is of the page as it
appears on the Income-tax Business Application portal. A
perusal of the screenshot of Case History Notings of the Dispute
Resolution Panel read with the affidavit filed by Mr. Satish
Sharma, the Chief Commissioner of Income-tax and Ms. Anne
Varghese, the Joint Commissioner of Income-tax, clearly indicate
that once the DRP directions are uploaded and the Document
Identification Number ("DIN") is generated, which is also visible
on the first page of the hard copy of the DRP directions, the said
document is visible to the AO of the Faceless Assessment Unit
("FAU") having jurisdiction over the permanent account number
of the assessee concerned. Thus, both the affiants agree that the
Dispute Resolution Panel directions once uploaded on the
Income-tax Business Application portal are automatically visible
to the Faceless Assessing Officer, if any assessment work item is
pending related to a particular permanent account number.
Admittedly assessment proceedings of the petitioner were
pending. Thus, undoubtedly the Dispute Resolution Panel
directions uploaded on the Income-tax Business Application
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
portal were readily and clearly visible and accessible to the
Faceless Assessing Officer of the assessee.
16...
17. Mr. Singh made all attempts to persuade us that despite the
Income-tax Business Application portal displaying the Dispute
Resolution Panel directions and the same being accessible to the
Faceless Assessing Officer, it was only on August 23, 2023, that
the same were received by the Faceless Assessing Officer. We
cannot accept this because, the E-assessment Scheme itself
provides that all communication is deemed to have been
received by the assessment units concerned once received
through the National e-Assessment Centre. Thus, once the e-
assessment Centre is in receipt of the Dispute Resolution
Panel directions, the period of limitation runs from that day.
There is no requirement of a deep dive in an analysis of the
phrase "upon receipt of directions" as it appears in section
144C(13) of the Act. The fundamental principle of
interpretation is to assign words their natural, original and
precise meaning, provided that the words are clear and take into
account the purpose of the statute. It is settled law that a
provision should be interpreted in its literal sense and given its
natural effect. This is the elementary golden rule of
interpretation of statutes. Since there is no ambiguity pertaining
to the phrase "upon receipt of the directions issued under sub-
section (5) of section 144C of the Act, the Assessing Officer shall.
. ." there is no requirement of delving in a further in-depth
analysis of the clear provision.
18 to 20...
21. Thus, if the provisions of section 144C as mandated by the
statute are not strictly adhered to the entire object of providing
for an alternate redressal mechanism in the form of Dispute
Resolution Panel stand defeated. That is not the intention of the
Legislature when the provision was introduced in the Act.
Section 144C(10) of the Act provide that the directions of
Dispute Resolution Panel are binding on the Assessing Officer.
By failing to pass any order in terms of the provision, the
Assessing Officer cannot be permitted to defeat the entire
exercise and render the same futile. When a statute prescribes
the power to do a certain thing in a certain way, then the thing
must be done in that way and other methods of performance are
forbidden. Once the statute has prescribed a limitation period
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
for passing the final order, it is expected that the internal
procedure of the Department should mould itself to give meaning
to and act in aid of the provision. Any procedural defect (there is
none in this case) in the internal mechanism of the working of E-
assessment Scheme, cannot operate against the interest of the
assessee. Hence, the Faceless Assessing Officer cannot be
believed that the Dispute Resolution Panel direction was received
by him only on August 23, 2023 despite being uploaded on the
Income-tax Business Application portal on March 25, 2021. The
failure on the part of Department to follow the procedure under
section 144C of the Act is not merely a procedural irregularity,
but is an illegality and vitiates the entire proceeding."
17. The Madras High Court in Taeyang Metal India (P) Ltd.
(supra) followed the principle laid down by the Delhi High Court in
the aforesaid judgment.
18. The common string traveling through the judgments of the
aforesaid three High Courts leaves no room for any doubt that the
Courts have taken a uniform view that Section 144C(13) mandates
the assessing officer to complete the assessment within one month
from the end of the month in which such a direction is issued.
Interestingly, the Bombay High Court considered paragraph
No.4(2) of Scheme of 2019 which makes it clear that all
communications among the assessment unit, review unit,
verification unit or technical unit or with the assessee or with any
other person shall be through the national e-assessment centre.
The use of words 'any other person' makes it very wide and shows
the intention of the scheme makers that they intended to bring
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
within its fold all nature of communications which shall be made
through national e-assessment centre.
19. The Delhi High Court in Louis Dreyfus Company India
Private Limited (supra) further held that it is obligatory under
the scheme to necessarily upload the communication on the ITBA
portal. Upon uploading the information on the portal, the period
of limitation as prescribed under Section 144C(13) of the Income
Tax Act would be liable to be computed bearing that crucial date
in mind.
20. Importantly, the Bombay High Court in Vodafone Idea Ltd.
(supra) poignantly held that as per the said scheme once e-
assessment centre is in receipt of DRP directions, the period of
limitation runs from that date. No further deep dive is required in
view of language of Section 144C(13) of the Income Tax Act.
21. Sri Vijhay K Punna, learned Standing Counsel for revenue,
placed reliance on the judgment of Supreme Court in the case of
National Faceless Assessment Centre (supra). The said case is
arising out of faceless assessment procedure envisaged in Section
144B of the Income Tax Act. The Apex Court while upholding the
view of the High Court observed that faceless assessment scheme
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
came into being recently and therefore, the revenue ought to have
been given some leverage to correct themselves and take corrective
measures. The said observation of the Supreme Court is related
to the faceless regime and cannot be stretched and made
applicable in this case. This is trite that the precedential value of
a judgment relates to the point which has been actually decided
and not what is logically flowing from it (see Dr. (Mrs.) Chanchal
Goyal v. State of Rajasthan 8). It is equally settled that a
singular different fact or point may change the precedential value
of a judgment (see Bhavnagar University Vs. Palitana Sugar Mill
(P) Ltd. 9).
22. So far, the judgment in the case of Commissioner of
Income Tax, Chennai (supra) is concerned on which reliance is
placed by Sri Vijhay K Punna, it is profitable to note that in the
said case, the Supreme Court considered Section 263(2) of the
Income Tax Act, in the said Section the word used is 'made' and
not 'receipt of the order'. The Supreme Court emphasized the
cardinal principle of the law that provision of statute is to be read
as it is and nothing is to be added or taken away from the
provision of the statute. In other words, this is well settled that
2003 (3) SCC 485
(2003) 2 SCC 111
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
when language of statute is clear and unambiguous, it has to be
given effect to irrespective of its consequences (see Nelson Motis
vs. Union of India 10).
23. The pivotal question is whether in view of the language
employed in Section 144C(13) whether directions of DRP can be
said to be received by the assessing officer on 30.06.2022. A
conjoint reading of Section 144C (5) and (13) makes it clear that
upon receipt of directions issued under Section 144C(5), it is
imperative for assessing officer to complete the proceedings within
one month from end of the month in which such a direction is
received. Thus, key words used in Section 144C(13) are 'upon
receipt of directions issued under Sub-Section (5)'
24. Although, Delhi, Bombay and Madras High Courts have
already taken a view and we respectfully agree with that once
such directions of DRP are uploaded on the portal, the DRP lost
control over it and date on which it entered the portal, the
recipient i.e, the assessing officer comes to know about it.
25. To elaborate, it is profitable to refer to Section 13(1) of the
I.T.Act. This Sub-Section deals with 'despatch of electronic record'
1992 (4) SCC 711
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
and envisages that 'despatch' of an electronic record is when it
enters the computer resource outside the control of originator.
Indisputedly, in this case, the 'originator' is the DRP. Sub-Section
(za) of Section 2 of the I.T.Act defines the word 'originator' and
reads thus:
"Section 2: Definitions
(za) ―originator means a person who sends, generates, stores
or transmits any electronic message or causes any electronic
message to be sent, generated, stored or transmitted to any
other person but does not include an intermediary;"
(Emphasis Supplied)
26. Once 'originator' enters a computer resource outside his
control, 'despatch' takes place. Sub-Section 2 (a) of Section 13 of
the I.T.Act deals with 'receipt' which makes it clear that 'receipt'
occurs at the time when the electronic record enters the
designated computer resource. Thus, the meaning of 'despatch' or
'receipt' is elaborately defined in aforesaid Sub-sections of Section
13 of the I.T.Act. The word 'computer resource' is also defined
under Section 2(k) of the I.T.Act, which reads thus:
"Section 2: Definitions
(k) ― computer resource means computer, computer system,
computer network, data, computer data base or software;"
27. In the instant case, parties have taken a diametrically
opposite view on the aspect whether the directions uploaded on
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
the portal on 30.06.2022 can be treated to be 'receipt' on the part
of the assessing officer. Sri Vijhay K Punna, learned Standing
Counsel for revenue contends that 'receipt' will be the date when
the e-mail was received by the revenue containing the DRP
directions i.e., on 05.07.2020.
28. As per the view taken by the aforesaid three High Courts
there is no doubt that when the originator/DRP sends its
directions in computer resource outside its control, it amounts to
'despatch' and similarly, 'receipt' takes place when said electronic
record enters the computer resource.
29. Section 282 of the Income Tax Act on which reliance was
placed by Sri Vijhay K Punna, learned Standing Counsel for
revenue makes it clear that in Sub-Section 1(c) of Section 282, the
communication through electronic record as per Chapter IV of the
I.T.Act was recognized and treated to be service of notice generally.
Chapter IV of the I.T.Act contains Section 13, which envisages
time, place of 'despatch' and 'receipt' of electronic record.
30. In order to meticulously examine the aspect of 'despatch'
and 'receipt', in the present case, it is apt to quote the relevant
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
portion of letter dated 05.03.2024 filed along with I.A.No.1 of 2024
in the present matter, which reads as under:
"2. In this regard, it is hereby stated that the direction dated
30.06.2022 were uploaded on ITBA portal on 30.06.2022.
Further, physical copy of the Directions was also sent to the
Assessing Officer on 30.06.2022 through Speed Post."
(Emphasis Supplied)
31. The Income Tax Department through communication dated
30.06.2022 (Annexure P-19) informed that the order under
Section 144C(5) dated 30.06.2022 is having Document No.(DIN)
ITBA/DRP/M/144C(5)/2022-23/1043689612(1). This is a system
generated document and it does not require any signature. A
conjoint reading of communications dated 30.01.2024 and
05.03.2024 (Annexure P-18) and communication dated
30.06.2022 (Annexure P-19) leaves no room for any doubt that
DRP's directions were despatched on 30.06.2022 and also
uploaded on the portal on the same date. Thus, the
DRP/originator had lost control over it on the date and time the
said directions were uploaded on the portal. Hence, same must be
treated to be a 'receipt' by the recipient i.e., the assessing officer
on the same day i.e., 30.06.2022. (See paragraph No.26.7 of
Suman Jeet Agarwal v. Income-tax Officer 11, where the Delhi
(2022) 449 ITR 517
SP,J & Dr.GRR,J
Wps_44891 & 44915 of 2022
High Court poignantly held that the portal of the department is
the 'computer resource in the control of the department').
32. In view of forgoing discussion, there is no cavil of doubt that
assessing officer received the DRP's directions on 30.06.2022 and
therefore, the limitation must be counted from that date and not
from 05.07.2022. The impugned assessment orders dated
30.08.2022 and 01.09.2022 that were issued counting the
limitation from 05.07.2022 in both the Writ Petitions are liable to
be set aside as the same are issued beyond permissible period of
limitation.
33. In the result, both the Writ Petitions are allowed by setting
aside the impugned assessment orders dated 30.08.2022 and
01.09.2022. There shall be no order as to costs. Miscellaneous
applications, if any, shall stand closed.
_________________
SUJOY PAUL, J
______________________
Dr. G. RADHARANI, J
09th January, 2025.
Note:
L.R. copy be marked.
B/o.TJMR/GVR
