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TMI Blog2022 (9) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... n 30th July 2022 determined that the said Notice though generated and signed on 31st March 2021 was issued through e-mail by the ITBA servers on 6th April, 2021. It has been brought to this Court s attention that the JAO has now self-determined that the same shall be governed by the judgment of the Supreme Court in Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT ] and JAO has accordingly proceeded to treat the Notice dated 31st March 2021 as notice under Section 148A(b). The aforesaid acts of the JAO belie the submissions of the counsel for the Department that the generation of the Notice on the ITBA screen constitutes issuance. It further substantiates the contention of the petitioners that the date and time of issue of the emails by the ITBA servers are readily available with the Department and therefore there is no disputed issue of facts. We therefore answer question no. (I) in negative against the Department and hold that the impugned Notices dated 31st March, 2021, which were despatched on 1st April, 2021, or thereafter, would not meet the test of issued under Section 149 of the Act of 1961 and would be time barred, unless saved by the judgment of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notices as recorded by the ITBA portal as the date of issuance and disregarded the date of generation of notice i.e. 31.03.2021. For notices despatched on or after 1st April 2021, the Department, following the Supreme Court s order in Ashish Agarwal (Supra) considered the notices as issued under Section 148A of the Act of 1961. This shows that the Department itself acknowledges and admits that the date of generation is distinct from date of issuance and the Department considers the despatch by ITBA Portal as the date of issue for the purpose of Section 149 of the Act of 1961. Authentication of notices and other documents - Whether the Section 148 Notices sent as an attachment through e-mails, from the designated e-mail addresses of the JAOs, which do not bear the respective JAO s digital signature are valid under Section 282A the Act of 1961 read with Rule 127A of the IT Rules? - As per the Compliance Affidavit, the ITBA portal was itself developed for the Department in such a way that it makes the affixation of DSC optional. The notice upon generation may or may not be affixed with DSC, it would, regardless of whether DSC is attached or not, be sent through the ITBA e-mail sy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llustratively, in W.P the Notice was never served on the assessee, instead the assessee claims that he became aware of the same on 23rd November, 2021 while checking his E-filing portal, the JAO is directed to verify the date on which the Notice was first viewed by the assessee, and consider the same as the date of issuance. Disposal of these Writ Petitions with the following directions: Category A : The Notices falling under category A , which were digitally signed on or after 1st of April, 2021, are held to bear the date on which the said Notices were digitally signed and not 31st March 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. Category B : The Notices falling under category B which were sent through the registered e-mail ID of the respective JAOs, though not digitally signed are held to be valid. The said petitions are disposed of with the direction to the JAOs to verify and determine the date and time of its despatch as recorded in the ITBA portal in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuance. If such date of issuance is determined to be on or after 01st April, 2021, the Notices will be construed as issued under Section 148A (b) of the Act of 1961 as per judgment in Ashish Agarwal (Supra). The Notices which in accordance with the law laid down in this judgment has been verified by the JAOs to have been issued on or after 01st April 2021 and until 30th June, 2021 shall be deemed to have been issued under Section 148A of the Act of 1961 as substituted by the Finance Act, 2021 and construed to be show-cause notices in terms of Section 148A(b) as per the judgment of the apex Court in Ashish Agarwal (Supra) and the JAOs shall thereafter follow the procedure set down by the Supreme Court in the said judgment. - W.P.(C) 10/2022, CM APPL.16/2022 (Interim relief & CM APPL.13602/2022 (condonation of delay) and Others - - - Dated:- 27-9-2022 - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA W.P.(C) 10/2022, CM APPL.16/2022 (Interim relief CM APPL.13602/2022 (condonation of delay) W.P.(C) 269/2022 CM APPL.789/2022 (for stay) W.P.(C) 271/2022 CM APPL.793/2022 (for stay) W.P.(C) 387/2022 CM APPL.1117/2022 (for ..... 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P.(C) 2861/2022 CM APPL.8267/2022 (for stay) W.P.(C) 2956/2022 CM APPL.8579/2022 (for stay) W.P.(C) 3038/2022 CM APPL.8822/2022 (for stay) W.P.(C) 3070/2022 CM APPL.8881/2022 (for stay) W.P.(C) 3074/2022 CM APPL.8887/2022 (for stay) W.P.(C) 3080/2022 CM APPL.8923/2022 (for stay) W.P.(C) 3081/2022 CM APPL.8927/2022 (for stay) W.P.(C) 3290/2022 CM APPL.9559/2022 (for stay) W.P.(C) 3438/2022 CM APPL.10035/2022 W.P.(C) 3503/2022 CM APPL. 10328/2022 W.P.(C) 3525/2022 W.P.(C) 3595/2022 W.P.(C) 3628/2022 CM APPL. 10749/2022 W.P.(C) 3630/2022 CM APPL. 10759/2022 W.P.(C) 3692/2022 CM APPL.10960/2022 W.P.(C) 3699/2022 CM APPL.10974/2022 W.P.(C) 3708/2022 CM APPL.11015/2022 W.P.(C) 3758/2022 CM APPL.11187/2022 W.P.(C) 3774/2022 CM APPL.11216/2022 (for interim relief) W.P.(C) 3780/2022 CM APPL.11228/2022 W.P.(C) 3804/2022 CM APPL.11281/2022 W.P.(C) 3808/2022 CM APPL.11288/2022 W.P.(C) 3817/2022 CM APPL.11311/2022 W.P.(C) 3831/2022 CM APPL.11371/2022 W.P.(C) 3876/2022 CM APPL.11537/2022 W.P.(C) 3942/2022 with CM APPL. 11747/2022 W.P.(C) 3951/2022 with CM APPL. 11773/2022 W.P.(C) 4020/2022 C.M.APP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittal, Advocates. Mr. Sushil K Tekriwal and Dr.Mamta Tekriwal, Advs. Mr.Deepak Singh Thakur, Mr.Ankit Kashyap Mr. Shubham Bhardwaj and Mr. Navjot Singh, Advs. Mr. Paras Chaudhry Mr.Dhananjay Grover, Advs. Ms. Mitika Choudhary, Adv. Mr. Ajay Wadhwa, Mr. Snehil Jha, Advocates. Mr. Nitin Gulati and Mr. Satyalipsu Ray, Advocates. Mr.Akshat Gupta, Adv. Mr. Piyush Kaushik, Adv. Mr. Gaurav Jain, Ms. Akshita Goel and Mr. Shubham Gupta, Advocate. Mr. P. Roychaudhuri with Mr. Gagan Gupta, Advocates. Mr. Anuj Aggarwal, ASG for GNCTD Ms. Ayushi Bansal Mr. Sanyam Suri, Advs. Mr.Sandeep Chilana, and Ms.Shambhavi Sinha, Mr. Priyojeet Chatterjee, Mr. Shekhar Sharma and Mr. Abdullah Tanveer, Advocates. Mr. Rishab Singla Mr. Pawan Shree Agrawal, Advs. Mr. V.P. Gupta and Mr. Anunav Kumar, Advocates. Mr.Rajeev Sharma Mr.Aditya Sharma with Mr. Shubham Bhardwaj, Advs. Mr. Sourav Vig Mr. Tushar Gupta, Advs. Mr.Gautam Jain Mr.Piyush Kumar Kamal, Advs. Mr. Abhishek Garg, Advocate with Mr. Aayush Kuchhal, Mr. Yash Gaiha, Advocates. T.M. Shivakumar, Adv. Respondents Through Mr.Zoheb Hossain, Sr. Standing Counsel with Mr. Mr.Vipul Agrawal and Mr.Parth Semwal, Junior Standing Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in W.P.(C) No. 4692/2022 (for exemption) CM APPL. 14263/2022 in W.P.(C) No. 4695/2022 (for exemption) CM APPL. 14396/2022 in W.P.(C) No. 4818/2022 (for exemption) CM APPL. 17327/2022 in W.P.(C) No. 5145/2022 (for exemption) CM APPL. 15322/2022 in W.P.(C) No. 5155/2022 (for exemption) CM APPL. 15413/2022 in W.P.(C) No. 5191/2022 (for exemption) CM APPL. 16183/2022 in W.P.(C) No. 5407/2022 (for exemption) CM APPL. 16185/2022 in W.P.(C) No. 5408/2022 (for exemption) Exemptions allowed, subject to all just exceptions. Accordingly, these applications stand disposed of. WRIT PETITIONS. 1. By way of the present batch of petitions, this Court has been called upon to decide the validity of the Notices issued under Section 148 of the Income Tax Act, 1961 ( Act of 1961 ), as it stood prior to its amendment on 01st April, 2021, by the Finance Act, 2021. Brief Facts 1.1. The Sections 147, 148, 149 and 151 of the Act of 1961 were amended vide the Finance Act of 2021, with effect from 1st April, 2021. 1.2. As per the unamended Section 149(1)(a) of the Act of 1961, the reassessment proceedings could be initiated withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITBA servers on or after 1st April, 2021; and/or despatched by JAO through normal post on or after 1st April, 2021. 1.11. In view of the admitted fact as regards the date of despatch being 1st April, 2021, or thereafter, the Department has sought to contend that for the purpose of determining the date on which the impugned Notices have been issued within the meaning of Section 149 of the Act of 1961, the date of despatch by ITBA software system through e-mail or speed post is not relevant and it is only the date of generation of the impugned Notices on the ITBA portal, which must be considered. 1.12. The petitioners have agreed that the date of receipt of the impugned Notice by the assessee is not the criterion for determining whether the impugned Notices have been issued within the time limit prescribed under Section 149 of the Act of 1961. Categories identified 1.13. The impugned Notices as categorized by the Counsel for the petitioners, Ms. Kavita Jha and recorded by this Court vide its order dated 24th March, 2022, are reproduced hereinunder: 1. Category A: is in respect of writ petitions where Notice is dated 31st March, 2021 or before but d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016-17 and 2017-18, they were getting time barred on 31st March, 2021, as per the newly amended Section 149(a) of the Act of 1961 and were therefore, as per law required to be issued on or before 31st March, 2021. 4. It is an admitted fact in all these petitions that though the impugned Notices were generated on the ITBA portal on 31st March, 2021, however, the same have been despatched only on or after 01st April 2021; and therefore the issue arising for determination before this Court is whether the impugned Notices will be governed by the re-assessment regime which came into effect on 01st April, 2021, or the re-assessment regime which was in existence as on 31st March, 2021. Submissions of the Department vide Compliance Affidavit dated 30th May, 2022 5. In accordance with the directions of this Court, on behalf of the Department, Mr. Vibhuti Bhushan, the Assessing Officer and Mr. Saurav Sharma, Joint Commissioner of the ITBA were present in Court on 23rd May, 2022, to clarify the circumstances relating to the despatch of the impugned Notices through e-mail on 1st April, 2022, and thereafter. 6. A compliance affidavit dated 30th May, 2022 ( Compliance Affidavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gering the e-mail process by the ITBA software system was approximately 6 hours. The said delay was due to the high number of documents being generated on the said date. Therefore, a substantial time was taken by the ITBA servers for triggering the e-mails and consequent receipt of e-mails by the assessee. 7.9. The ITBA software s e-mail triggering system is programmed in such a manner that e-mails are triggered in a batch mode, in a controlled manner i.e., at the rate of 400 documents per 2 minutes so as to avoid getting the ITBA system s IPs blacklisted by e-mail service providers like Yahoo or Google. 7.10. The ITBA software s process of triggering of e-mail and sending of Notices to the E-filing portal s data base is an automated function. 7.11. The e-mails are triggered by the ITBA software using the Simple Mail Transfer Protocol ( SMTP ) from back end, which reach the messaging gateway of the ITBA system. Upon reaching the messaging gateway, message ID is created by the messaging gateway and the same gets updated in the e-mail table . Thereafter, depending on the availability of the destination domain server i.e. assessee s server and the user account, e-mails are e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, 2021, which bear digital signature of a subsequent date and form part of category A , the note appearing as a footer of the impugned Notices to the effect that, if digitally signed, the date of signature may be taken as date of document has no statutory backing. There are no Central Board of Direct Taxes ( CBDT ) instructions or circulars which have led to the said note appearing in the communications issued through the ITBA portal. Therefore, the Department is not bound by that note. Affixation of DSC is neither mandatory nor a requirement for issuance of a Notice by the JAO. Hence, the date of Notice should be reckoned as 31st March 2021 for category A as well. 9.4. The impugned Notices forming part of category C , upon generation, bears the date as 31st March, 2021, therefore, there can be no dispute that the Notices were in fact generated by JAO on 31st March, 2021, and not thereafter. Further, there does not exist any possibility of ante-dating the said Notices once a DIN Number has been assigned. 9.5. On perusal of the Compliance Affidavit, it can be seen that the time lag in the despatch of Notice by the ITBA portal was on account of the programming of the ITB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppears in Clause (iv) of Explanation 1 to Section 153 is not to be interpreted in the same manner as words issue or serve , the act of issue of Notice therefore precedes the act of despatch. [Sanjay Engineering (Supra)] 10.3. The Division Bench of the Madras High Court in the case of Malavika Enterprises Vs. CBDT, (2022) 137 taxmann.com 398 (Madras) had, on facts, recorded that the e-mail attaching the Section 148 notice had been despatched on 31.03.2021 and thus, validly issued under Section 149 of the Act of 1961. 11. Mr. Sunil Aggarwal, learned Senior Standing counsel for the Department submitted as follows: 11.1. As per the ITBA Assessment User Manual (Version 1.9), the moment the JAO exercises the option to digitally sign , the DSC appended notice is sent by e-mail to assessee and simultaneously shared with the E-filing portal account of assessee. The JAO therefore, loses control over the process as soon as he/she chooses the option to Digitally Sign and thereafter the entire process is machine driven. Hence, in petitions where the impugned Notice bears the date and time of digital signature as 31st March, 2021, the same are liable to be dismissed. 11.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssees came to know later on through E-filing portal on receipt of subsequent notice under Section 142(1) of the Act of 1961. 12.5. Category E : The impugned Notices are dated 31st March, 2021, and bear DIN of the said date. The subsequent despatch on 01st April, 2021, or thereafter, through speed post does not affect the validity of the Notice. The Notice is issued validly for the purpose of Section 149 of the Act of 1961. 13. The learned counsel for the respondents have not disputed that the despatch of the impugned Notices in categories A , B E were admittedly done on or after 01st April, 2021. Their sole contention was that upon generation of Notice on 31st March, 2021 the test of issued for the purpose of Section 149 of the Act of 1961 was satisfied. They have not addressed the Court on facts pertaining to category D notices. As per the assessees, there was no communication of the notices falling under category D either by email or speed post. Arguments on behalf of the petitioners 14. Ms. Kavita Jha, Mr. Ved Kumar Jain, Mr. Piyush Kaushik, Mr. Kapil Goel, Mr. T.M. Shiv Kumar and Mr. Jaspal Singh Sethi, learned counsel have submitted arguments on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tronic 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 ITBA 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 ITBA 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 JAO. 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: Notice/ Communication Reference ID: 100036566022 Notice u/s ITBA/AST/F/17/202122/1034161151(1) Document reference ID Description: [ITBA] Issue letter Submit Response ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withheld by the respondents. 17.2. In the writ petitions, wherein the e-mail was triggered by ITBA servers before 31st March, 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. Vs. ITO, Ward 22(3). However, in the petitions where the e-mail was triggered on 01st April, 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 ITBA Screen. 17.3. The contention of the respondent, that the Notice is deemed to be issued upon generation on the ITBA Screen is contradicted by the Department s own admission that upon generation the JAO has up to 15 days to sign the said Notice. This hiatus evidences that upon generation, the notice is not deemed to be issued . 17.4. The Department has itself admitted in the Compliance Affidavit, that the e-mail address of the assessee is inserted in the email table in ITBA, only when the ITBA e-mail software system is triggere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of Notice under Section 149 of the Act of 1961. [ Yuvraj v. Income Tax Officer Ors. in W.P.(C) No. 28293 of 2021 order dated 3rd March 2022 (MP), and Kanubhai M. Patel (Supra)] 18.4. It is only upon despatch of the e-mail from ITBA servers that the impugned Notices could be held to have been issued [Advance Infra developers (P) Ltd. v. Adjudicating Authority, (2021) 127 taxmann.com 197 (Madras)]: 47. The argument in regard to the order being beyond the control of the person passing it is also relevant, based upon the principle that an order must be deemed to be complete and valid only when it is prepared, finalised and transmitted for communication to the concerned person. 19. Mr. Jaspal Singh Sethi, learned counsel for the petitioner submitted as follows: 19.1. The screenshot annexed as Annexure P-5 in W.P. (C) No. 4567 of 2022 shows that each Notice in addition to a DIN, also contains a Communication Reference ID ( CRI ). The CRI is generated by the ITBA portal to record the date of the issuance of the Notice. Although the CRI for the impugned Notices issued under Section 148 of the Act of 1961, is displayed on the E-filing portal, the date of issuanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. 20.3. The Section 282A of the Act of 1961, stipulates communication of the Notice as a sine qua non for due issuance of a Notice. Hence, the submission that generation of notice on the ITBA screen satisfies the condition of issued under Section 149 is contrary to the mandate of Section 282A of the Act of 1961. 20.4. Until the ITBA servers transmit the e-mail to the destination servers of the assessee s e-mail service provider, there can be no valid communication of the Notice therefore, consequently, there would be no valid issuance of Notice under Section 149 read with Section 282A of the Act of 1961. 21. Mr. Kapil Goel, learned counsel for the petitioner submitted as under: 21.1. The requirement of issuance of Notice under Section 149 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date of Service Status 31.03.2021 AHIPG3000F ANAND GOEL Notice u/s 148 ITBA/ AST/S /148 /2020 -1/103211 / 6278 (1) Attachments Email Email Delivered Sent Email (?) Email Delivery Status Email Sent On Email Delivered On Shared with e Proceeding on Email Details Delivered 01/04/2021 05:29:41 AM 01/04/2021 05:29:45 AM 03/04/2021 04:01:39 AM .. 21.5. Therefore, the time when the e-mail containing the impugned Notice as an attachment was sent by the ITBA servers, is duly available with the Department in its ITBA portal. 22. The learned counsel for the petitioner Mr. Pawan Shree Agarwal, submitted as under: 22.1. The impugned Notice in this petition is distinct from Categories A to E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the test of the expression shall be issued in Section 149 of the Act of 1961, and saves the Notices from being time barred? - The Court has answered this in the negative in favour of the assessee. 25.1. It has emerged as an admitted position on facts, that the e-mails attaching the impugned Notices dated 31st March, 2021, were despatched by the ITBA servers on 01st April, 2021, or thereafter. 25.2. Faced with the aforesaid factual position, it has been contended by the Department that since generation of impugned Notices on the ITBA portal on 31st March, 2021, is undisputed, the singular act of generation of Notice by JAO satisfies the requirement of issued for the purpose of Section 149 of the Act of 1961 and despatch of the Notice on 31st March, 2021 is not a mandatory requirement. 25.3. The Department contends that since each of the impugned Notices bear a DIN, its generation as on 31st March, 2021, is beyond doubt. It is further contended that since, on the ITBA portal, after generation of Notice the JAO is left with no power to amend, alter, cancel or ante-date the Notice, the said act of generation conclusively establishes that the Notice has been issued. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spatch is an essential condition to complete the act of issuance. The Court clarified that service on the recipient was not a condition precedent for satisfying the act of issuance. 25.6. It would also be useful to refer to the judgment of the Supreme Court in the case of R.K. Upadhyaya (Supra). In the said case, the Supreme Court was concerned with the controversy of the validity of a notice with reference to Sections 148 and 149 of the Act of 1961. In the said case, the notice under Section 148 of the Act of 1961, was despatched by registered post on 31st March, 1970, but the same was received by the assessee on 03rd April, 1970; and therefore, the Gujarat High Court after observing that the expression issued and served in Section 148 and 149 have the same meaning, held that the notice was time barred. In appeal, the Supreme Court after taking note that the Notice was despatched by registered post on 31st March, 1970, set aside the judgment of the High Court. The Supreme Court held that the service of notice is not a condition precedent for satisfying the condition of issued . The date of despatch of the notice was taken into consideration by the Supreme Court as the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said notices 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 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. (Emphasis Supplied) The Gujarat High Court categorically held that it is on the date of despatch of the Section 148 notice that the same will be held to be issued for the purpose of Section 149 of the Act of 1961. 25.8. The Madras High Court in Smt. Parveen Amin Bhathara (Supra), after approving the dicta of Kanubhai Patel (Supra) and considering Section 282 of the Act of 1961 and Rule 127 of IT Rules, held as under: 8. In the present case, the respondent reopened the assessment of the appellant for the assessment year 2011-12, through notice dated 31.03.2018 under section 148 of the Act. Admittedly, the limitation period of six years for reopening the assessment, came to an end on 31.03.2018. The main plank of contention of the learned counsel for the appellant is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to hold that drawing up a Notice on 31st March, 2021, and digitally signing the same, in the absence of despatch, does not amount to issuance of Notice within the meaning of Section 149 of the Act of 1961. The High Court after elaborately discussing the provisions of Sections 282 and 282A of the Act of 1961, and the provisions of Section 13 of the Act of 2000, held that, since the impugned Notice therein though dated 31st March, 2021, was issued through e-mail on 06th April, 2021, the same was time barred and therefore liable to be quashed. The Court at paragraph 29 and 30 held as under: 29. Thus, considering the provisions of sections 282 and 282A of the Act, 1961 and the provisions of section 13 of the Act, 2000 and meaning of the word issue we find 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. Section 13(1) of the Act, 2000 provides that unless otherwise agreed, the despatch of an electronic re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form the e-mail should have been despatched on or before 31st March 2021. In the present writ petitions, the despatch by post and e-mail was carried out on or after 01st April 2021 and therefore, we hold that, the impugned Notices were not issued on 31st March 2021. 25.14. The Department has not disputed the correctness of the law settled by the Supreme Court in the case of R.K. Upadhyaya (Supra) in which the Court was concerned with issuance of the Section 148 notice in paper form and concluded that, since the date of despatch was within prescribed period of limitation, the notice was validly issued for the purpose of Section 149 of the Act of 1961, and held that the date of service of notice was not relevant. In fact, the Department has relied upon the said judgment. The said judgment squarely applies to Notice classified as category E . The amendments to the Act of 1961 including Section 282A was to enable the income tax authority to issue notice either in paper form or electronic form and were made to provide an adequate legal framework for paperless assessment. Similarly, setting up of the digital platform of ITBA portal and the E-filing portal is for facilitating asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Madras High Court concluded that the notice has been validly issued on 31st March, 2021. The relevant portion of paragraph 8 of this judgment reads as follows: 8. Coming to the facts of the case, it is stated that notice under section 148 of the Act of 1961 is said to have been issued on 313-2021 for the assessment year 2013-2014, followed by consequential notices. It is the case of the petitioner that the notice is said to have been issued vide email at 6.42 pm, but was served on 1-4-2021 at 2 am and, therefore, the unamended provision of section 148 of the Act of 1961 would not be applicable to the case We do not find that this judgment takes the case of the Department any further as the Section 148 notice in the case was duly despatched on 31st March, 2021. 25.17. The Department has not cited any judgment which would support its contention that mere drawing up of Notice and signing it (pending despatch) amounts to issuance. The counsel for the respondent placed heavy reliance on the judgment of the Supreme Court in M.M. Rubber Co. (Supra). In the said case as well, the apex Court was concerned with the issue of limitation while determining i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction No. 3 [F No. System/ITBA/Instruction/Assessment/177/16-17/] dated 03.02.2017 , also illustrates the same distinction: Details of the Authority/party from whom information is requisitioned can be entered alongwith date for compliance and the Notice can then be generated and issued. 25.19. The counsel for the Department have also sought to argue that generation of a Notice with DIN on ITBA Screen conclusively indicates that the Notice has been irrevocably issued. The submission of the respondent is not borne out from the applicable circular regarding DIN issued by CBDT and is therefore a mere ipse dixit of the counsel. 25.20. As per Circular No. 19/2019 (F. No. 225/95/2019-ITA.II) dated 14th August, 2019 issued by the CBDT, the DIN was introduced to maintain a proper audit of trail of communications issued by income tax authority. The said circular does not state that the generation of DIN would automatically constitute issuance of the notice. Relevant extract from the aforementioned circular is reproduced as under: However, it has been brought to the notice of Central Board of Direct Taxes (the Board) that there have been some instances in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice dated 31st March 2021 as notice under Section 148A(b). The aforesaid acts of the JAO belie the submissions of the counsel for the Department that the generation of the Notice on the ITBA screen constitutes issuance. It further substantiates the contention of the petitioners that the date and time of issue of the emails by the ITBA servers are readily available with the Department and therefore there is no disputed issue of facts. 25.23. We therefore answer question no. (I) in negative against the Department and hold that the impugned Notices dated 31st March, 2021, which were despatched on 1st April, 2021, or thereafter, would not meet the test of issued under Section 149 of the Act of 1961 and would be time barred, unless saved by the judgment of the Supreme Court in Ashish Aggarwal (Supra). 25.24. With respect to impugned Notices falling in category A , there is an additional factor which evidences that the said Notices were admittedly not issued on 31st March, 2021. The said Notices were digitally signed on 01st April, 2021, or thereafter. The note appearing at the foot of each Notice clearly declares that the date of the affixation of digital signature shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd thereafter was sent and delivered through ITBA portal on 15th April 2021, in this case, the date of the impugned Notice is 1st April 2021 (i.e., the date on which it was digitally signed) and it was issued through e-mail on the 15th of April 2021. Finding for Notices falling under category E 25.26. With respect to the impugned Notices which have been classified as category E , the date of despatch through speed post is determined as the date of issuance following the judgment of the Supreme Court in the case of R.K. Upadhyaya (Supra). Illustratively, in W.P. (C) 11010 of 2021, the Notice dated 31st March 2021 was booked for despatch through speed post on 10th June 2021, in this case, the Notice can be said to have been issued only on 10th June 2021 i.e. when it was booked for despatch through speed post. 25.27. With respect to the impugned Notices sent by e-mail and forming subject matter of category C the Department has raised an additional defence that though the e-mails were admittedly despatched on 01stApril, 2021 or thereafter, the same was due to the time taken by ITBA e-mail software system to trigger the e-mails, this delay in despatch should not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 21 of 2000). Further, the registered account on the E-filing website is deemed to be computer resource designated by assessee in accordance with Section 13 of the Information Technology Act, 2000 (No. 21 of 2000). Therefore, the contention of Mr. Sunil Aggarwal, learned counsel for the Department, that Section 13 of the Act of 2000, is not applicable to the impugned Notices issued through e-mail, is in contradiction with the aforementioned notifications and the statutory provision of Section 282 of the Act of 1961. 26.3. Now therefore for determination of the time of despatch of the impugned Notices issued through e-mail, Section 13 of the Act of 2000 has to be referred to. The relevant portion of Section 13 of the Act of 2000 is reproduced hereunder: 13. Time and place of despatch and receipt of electronic record.-( 1) Save as otherwise agreed to between the originator and the addressee, the despatch of an electronic record occurs when it enters a computer resource outside the control of the originator. (2) 26.4. Thus, on a plain reading of the aforementioned provision, it is evident that, the despatch under Section 13 of the Act of 2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid findings of this Court, the submissions made by Mr. Zoheb Hossain, learned Senior Standing counsel for the Department, that the JAO and the ITBA are distinct and that the JAO 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 ITBA 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 ITBA s email system is triggered and the e-mail leaves the ITBA servers. [Daujee Abhushan (Supra), Yuvraj v. Income Tax Officer Ors., (Supra), Advance Infra-developers (P) Ltd. (Supra)]. 26.10. Qua the aforesaid, the learned counsel for the petitioners Mr. Ved Jain and Mr. Kapil Goel had submitted a compilation of recent judgments passed by the Allahabad High Court following the Daujee Abhushan (Supra) case. On perusal of the judgments submitted, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners and respondents, is reproduced hereinunder: 26.14. For the purpose of this illustration, the double arrows indicate transmission between computer resources that are of the ITBA 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 MTA i.e. server of the ITBA 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 MTA server of the ITBA and enters a computer resource that the Department does not have control over, i.e. the MTA server of the e-mail service that the assessee is using. 26.16. The counsel for the petitioners have brought this Court s attention to the screenshot of the E-filing portal submitted by the assessee, Mr. Bhushan Lal Pandita in W.P.(C) 4567/2022. The said screenshot shows that the E-filing portal, for the notices issued to the said assessee under Section 142(1), dul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s triggered and the Notices leave the last ITBA server would be considered. 26.21. We therefore answer question no. (II) in affirmative and hold that despatch as per Section 13 of the Act of 2000, is a sine qua non and happens when the electronic mail message leaves the ITBA s servers. 26.22. We answer question no. (III) against the Department and hold 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. 26. 23. We also take judicial notice of the fact that the Department from May, 2022, for Notices issued on or after 1st April 2021, has considered the date and time of despatch of the notices as recorded by the ITBA portal as the date of issuance and disregarded the date of generation of notice i.e. 31.03.2021. For notices despatched on or after 1st April 2021, the Department, following the Supreme Court s order in Ashish Agarwal (Supra) considered the notices as issued under Section 148A of the Act of 1961. This shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 292B of the Act of 1961. 27.3. The learned counsel for the petitioners, in response, had relied upon Instruction No. 1/2018 [F. No. 225/157/2017- ITA II] dated 12.02.2018 and Notification No. 137/ 2021 dated 13.12.2021 and argued that the affixation of DSC is mandatory as per these circulars. 27.4. The aforementioned provisions relied on by the Revenue are reproduced hereunder: [Authentication of notices and other documents. Section 282A. (1) Where this Act requires a notice or other document to be issued by any income-tax authority, such notice or other document shall be [signed and issued in paper form or communicated in electronic form by that authority in accordance with such procedure as may be prescribed]. (2) Every notice or other document to be issued, served or given for the purposes of this Act by any income-tax authority, shall be deemed to be authenticated if the name and office of a designated income-tax authority is printed, stamped or otherwise written thereon. (3) For the purposes of this section, a designated income-tax authority shall mean any income-tax authority authorised by the Board to issue, serve or give such notice or o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E-Proceeding' facility through assessee's account in E-filing website of Income-tax Department. . 4.2 Use of digital signature by Assessing Officer: All Departmental orders/communications /notices being issued to the assessee through the 'e-Proceeding' facility are to be signed digitally by the Assessing Officer. . (Emphasis Supplied) Notification No. 137/2021 - S.O. 5187(E) - e-Verification Scheme, 2021, dated 13.12.2021. . 3. (1) The scope of the Scheme shall be in respect of: (i) calling for information under section 133 of the Act; (ii) collecting certain information under section 133B of the Act; (iii) calling for information by the prescribed income-tax authority under section 133C of the Act; (iv) exercise of power to inspect registers of companies under section 134 of the Act; and (v) exercise of power of Assessing Officer under section 135 of the Act. . . 10. Authentication of electronic record.― For the purposes of this Scheme, an electronic record shall be authenticated by the (i) Commissioner of Income-tax (e-Verification) or the Prescribed Authority, as the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch notice or document should be signed by that authority in manuscript. It is proposed to amend sub-section (1) of section 282A so as to provide that notices and documents required to be issued by income-tax authority under the Act shall be issued by such authority either in paper form or in electronic form in accordance with such procedure as may be prescribed. . These amendments will take effect from the 1st day of June, 2016 27.10. The proviso to Section 282A and the amendments carried-out to the said section by the Finance Act, 2016, therefore, gives recognition to the notices served in the e-form. Sub-section (2) of Section 282A provides that any notice issued by such authority with his/her name and his/her office provided, as may or otherwise written thereon will be deemed to be authenticated and thus validly issued. 27.11. Further, it should be noted that, where the legislature intended to mandate the affixation of the digital signatures, it has specifically provided for the same in the provision itself. This is illustrated in Section 144 B(6)(i)(b) of the Income Tax Act, 1961, which reads as under : Section 144B (6)(i)(b) of Income Tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be invalid simply because DSCs were not appended to the Notices. 27.17. The JAO is therefore directed to determine time of despatch as recorded by the ITBA portal for each of these Notices and the date and time of despatch as determined by the JAO will be considered to be the date of issuance. Illustratively, in W.P.(C) No. 1761 of 2022 for the Notice dated 31st March 2021, which was not digitally signed and was received on 16th April 2021, the JAO is directed to determine the date and time of despatch as recorded by ITBA portal and consider the same as the date of issuance. 28. Question (V): Whether upload of the Section 148 Notice on the My Account of the assessee on the E-filing portal is valid transmission under the Act of 1961? - The Court has answered this in the negative, against the Department. 28.1. With respect to the Notices falling under the category D dated 31st March 2021 and digitally signed on 31st March 2021 it has been stated that, they were not served on the assessees either by e-mail or post or by courier services as they were just uploaded on the E-filing portals of the assessees. It is the case of the petitioners that no real time alert was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no reason whatsoever has been provided to explain as to why these Notices were not e-mailed to the select few assessees falling under category D and was only uploaded on the Efiling portal. It is also unclear as to why the Notices though digitally signed on 31st March 2021 were never e-mailed to the assessees, because, as per the Compliance Affidavit, upon affixation of DSC by the JAO the e-mail software system of the ITBA portal would be automatically triggered. 28.6. It should be noted that, when the legislature decided to include this mode of transmission i.e. placing it on the E-filing portal/registered account of the assessee, as valid service in the Act of 1961, it duly included the safeguard of a real time alert. For reference, Section 144 B(6)(ii)(a) of the Act of 1961 statutorily recognizes this mode of transmission between the Income Tax authority and the assessee. Section 144 B(6)(ii)(a) reads as under: Section 144B (6)(ii)(a) xxx xxx xxx xxx (ii) every notice or order or any other electronic communication shall be delivered to the addressee, being the assessee, by way of- placing an authenticated copy thereof in the registered account of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) in the case of addressee being a company, e-mail address of the company as available on the website of Ministry of Corporate Affairs; or (iv) any e-mail address made available by the addressee to the income-tax authority or any person authorised by such income-tax authority. 30. Additionally, it is a settled position of law that the notice under Section 148 of the Act of 1961 must be served in accordance with the procedure established by law, to the correct addressee, otherwise the reassessment proceedings would be invalid in law. [Commissioner of Income -Tax (Central) - I v. Chetan Gupta (Supra)] The issuance of e-mail attaching electronic notice to an unrelated e-mail address does not constitute as due despatch and therefore, the Notices cannot be said to have been issued on 31st March, 2021. However, in each of these matters, since an authenticated copy of the notice was placed on the registered account of the assessee on the E-filing portal, as that is how the petitioners learnt about the notices, these notices will be held to have been issued on the date on which the Notices were first viewed by the assessees on their E-filing portal. 31. For the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 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 JAOs 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 1st of April, 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. 31.6. Notices sent to unrelated e-mail addresses: The petitions challenging Notices which were sent to unrelated e-mail addresses are disposed of with the direction the JAOs to verify the date on which the Notice was first viewed by the assessee on the E-filing portal and consider the same as the date of issuance. If such date of issuance is determined to be on or after 01st April, 2021, the Notices will be construed as issued under Section 148A (b) of the Act of 1961 as per judgment in Ashish Agarwal (Supra). 31.7. We may note that in the writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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