2023 (9) TMI 1602 - HC - Income Tax

Validity of reopening notice issued as barred by limitation - time taken by the ITBA e-mail software system to dispatch emails - as submitted notice which was impugned in the writ petition though bears a date and signature of the authority showing that it was signed on March 31, 2021 but was actually uploaded for communication after 31st March, 2021, which has to be treated as the date of issuance of the impugned notice - HELD THAT - The time taken by the ITBA s e-mail software system in triggering the e-mail and transmitting the said e-mails from the ITBA servers is attributable to the Department and, therefore, for the e-mails despatched on 1st April, 2021 or thereafter, the notices are held not to have been issued on 31st March, 2021. Thus, the appellant/revenue appears to have a wrong impression that the decision in Suman Jeet Agarwal 2022 (9) TMI 1384 - DELHI HIGH COURT would substantiate their case. Thus, considering the facts and circumstances of the case, we have no hesitation to hold that the notice which has been impugned in the writ petition under Section 148 of the Act is barred by limitation and cannot be enforced. Decided against revenue.

Summary

Issues:
1. Delay in filing the appeal by the revenue.
2. Whether the notice issued under Section 148 of the Income Tax Act is barred by limitation.

Analysis:
The High Court of Calcutta heard an appeal by the revenue challenging a notice issued under Section 148 of the Income Tax Act, 1961. The revenue acknowledged a delay of 426 days in filing the appeal, which the Court decided to condone despite an unsatisfactory explanation due to the presence of a legal question. The main issue was whether the notice issued by the department was barred by limitation. The Court considered previous judgments like Bagaria Properties and Investment (P.) Ltd. vs. Union of India and Manoj Jain vs. Union of India. These cases were later appealed to the Supreme Court, which issued directions in Union of India vs. Ashish Agarwal regarding notices issued under unamended Section 148 of the IT Act. The Court highlighted specific directions from the Supreme Court, emphasizing the need for the Assessing Officer to provide information to the assessees within a specified timeframe. However, the revenue failed to comply with these directions, leading to the dismissal of their appeal.

The appellant/revenue relied on a Delhi High Court decision to support their case but failed to recognize that the decision actually favored the assessee. The Court noted that the time taken by the ITBA e-mail software system to dispatch emails was intentional and not a glitch, attributing the delay in issuing notices to the Department. The Court ultimately concluded that the notice in question was indeed barred by limitation and could not be enforced. Despite the revenue's arguments, the Court found no merit in their case and dismissed the appeal accordingly.