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TMI Blog2024 (7) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 [ 2022 (5) TMI 240 - SUPREME COURT] 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. 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 [ 2022 (9) TMI 1384 - DELHI HIGH COURT] 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. WP allowed. - HON BLE SRI JUSTICE P.SAM KOSHY AND HON BLE SRI JUSTICE N.TUKARAMJI For the Petitioner : Mr. Dundu Manmohan, learned counsel for the petitioners in W.P. Nos. 18098, 14302, 14331, 20301 and 21181 of 2022; Mr. Y. Ratnakar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Income-Tax Officer and others [2022] 449 I.T.R. 517 (Del.), 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 cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvers 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 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 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 Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment'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 : 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 Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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