Chitra Lekha Gupta Vs ITO (ITAT Delhi)
Summary: The Delhi ITAT, in ITA No.6147/Del/2026 for AY 2013-14, held that the reassessment order dated 25.03.2022 could not be sustained because the notice under Section 148, though dated 31.03.2021, was actually issued to the assessee by email on 01.04.2021 at 07:12:11 A.M. Since the substituted provisions of Sections 147 to 151 of the Income-tax Act, 1961, introduced by the Finance Act, 2021, applied from 01.04.2021, the Assessing Officer was required to follow the new reassessment procedure, including Section 148A, in accordance with the Supreme Court’s decision in Union of India Vs Ashish Agarwal, reported in 444 ITR 1 (SC). Although a notice under Section 148A(b) was subsequently issued on 31.05.2022 and the assessee replied on 13.06.2022, the proceedings under Section 148A were ultimately dropped by the order under Section 148A(d) dated 20.07.2022 after recording that the alleged escaped income was below Rs 50 lakhs and therefore did not satisfy the statutory conditions for reopening under the amended provisions. The Tribunal relied upon the Delhi High Court’s decision in Rajesh Chopra Vs ITO and the coordinate-bench decision in Aseem Sehgal Vs ITO, holding that the date of dispatch of an email constitutes the date of issuance and that mere generation of the notice or DIN on 31.03.2021 did not amount to issuance. Consequently, the reassessment framed under the old provisions of Sections 147 to 151 was held to be bad in law and void ab initio. The Tribunal quashed the reassessment, left the other factual and legal grounds open as academic, and partly allowed the assessee’s appeal.
SEO Title: Delhi ITAT Quashes Reassessment Framed Under Old Regime After 1 April 2021 Notice
SEO Description: Delhi ITAT quashes reassessment as notice emailed on 1 April 2021 attracted amended Sections 147–151 and Section 148A procedure.
Delhi ITAT Quashes Reassessment: Section 148 Notice Emailed on 1 April 2021 Governed by New Reassessment Regime
The Delhi ITAT held that a notice under Section 148, though dated 31 March 2021, was actually issued on 1 April 2021 when it was dispatched by email. Therefore, the reassessment was governed by the amended Sections 147 to 151, including the mandatory procedure under Section 148A, and not by the old provisions.
The Tribunal noted that the Assessing Officer had completed the reassessment on 25 March 2022 under the old regime, whereas the original notice ought to have been treated as a show-cause notice under Section 148A(b) in accordance with the Supreme Court’s decision in Union of India v. Ashish Agarwal. Significantly, the subsequent proceedings under Section 148A were themselves dropped after recording that the alleged escaped income was below ₹50 lakh and did not satisfy the statutory conditions for reopening.
Following the Delhi High Court’s decision in Rajesh Chopra and the coordinate-bench ruling in Aseem Sehgal, the ITAT held that the date of dispatch of the email constitutes the date of issuance; mere generation of the notice or DIN on 31 March 2021 does not amount to issuance. Consequently, the reassessment framed without following the new statutory procedure was declared bad in law and void ab initio, and the assessee’s appeal was partly allowed.
List of Cases Discussed / Relied Upon
- Union of India vs Ashish Agarwal, 444 ITR 1 (SC) — held that notices issued under the old reassessment regime after 01.04.2021 were to be treated in accordance with the substituted provisions, including as show-cause notices under Section 148A(b), with the prescribed new procedure to be followed.
- Aseem Sehgal vs ITO, ITA Nos. 154 to 156/Del/2025 dated 30-7-2025 — coordinate-bench decision holding that a notice dated 31.03.2021 but emailed on 01.04.2021 attracted the amended reassessment provisions and that reassessment framed under the old provisions was bad in law and void ab initio.
- Rajesh Chopra vs ITO, 2025 (6) TMI 83 (Del HC), W.P. (C) 12561/2022 dated 28-5-2025 — held that where notice is sent electronically, the date of dispatch of the email is the date of issue.
- Suman Jeet Agarwal v. Income Tax Officer and Ors., (2022) 449 ITR 517 — considered the meaning of “issued” and held that issuance requires due dispatch; where notice is sent electronically, the date of dispatch is relevant for determining the date of issue.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The appeal in ITA No.6147/Del/2026 for AY 2013-14, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 26.03.2026 against the order of assessment passed u/s 147 r.w.s. 144B of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 25.03.2022 by the Assessing Officer, NFAC, Delhi (hereinafter referred to as ‘ld. AO’).
2. The preliminary issue to be decided in this case is as to whether the reassessment order framed on 25-3-2022 under section 147 of the Act could be construed as a valid order in the facts and circumstances of the instant case.
3. I have heard the rival submissions and perused the materials available on record. In the instant case, it is not in dispute that notice under section 148 of the Act dated 31-3-2021 stood issued to the assessee on 1-4- 2021 at 07:12:11 A.M. This notice was apparently issued under the old regime. But since the notice was issued to the assessee on 1-4- 2021, the applicable law on that date would be the substituted provisions of section 147 to 151 of the Act as introduced by Finance Act 2021. Accordingly, the learned AO in consonance with the decision of Hon’ble Supreme Court in the case of Union of India vs Ashish Agarwal reported in 444 ITR 1 (SC) had to follow the procedures prescribed under the new regime under the amended provisions of sections 147 to 151 of the Act. Notice under section 148A(b) of the Act stood issued to the assessee on 31-5-2022. Reply was filed by the assessee on 13-6 -2022 filing objections to the notice under section 148A(b) of the Act. Order under section 148A(d) of the Act was passed on 20-07-2022 wherein the reopening proceedings were dropped after recording that the alleged escaped income was less than Rs 50 lakhs and therefore did not satisfy the statutory conditions for reopening under the amended provisions of section 147 to 151 of the Act. In the meanwhile, the learned AO proceeded to complete the reassessment on 25-3- 2022 based on the original notice issued under section 148 of the Act on 1-4- 2021, treating that the said notice was issued under the old regime and as per the unamended provisions of section 147 to 151 of the Act.
4. In my considered opinion, the Hon’ble Supreme Court had categorically held in the case of Ashish Agarwal referred supra that any notice issued under section 148 of the Act on or after 1-4- made by following the procedures prescribed under the amended provisions of section 147 to 151 of the Act. When the amended provisions of section 147 to 151 of the Act were not followed, then the reassessment order framed thereon would have to be declared void abinitio. This issue is no longer res integra in view of the coordinate bench decision of Delhi Tribunal in the case of Aseem Sehgal vs ITO in ITA Nos. 154 to 156 /Del / 2025 dated 30-7-2025 where it was held as under:-
“1. The appeal in ITA Nos. 154 to 156/Del/2025 for AY 2015-16 to 2017- 18, arise out of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ ld. NFAC’, in short] dated 28.11.2024 against the order of assessment passed u/s 147 r.w.s. 144B of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.03.2022 by the Assessing Officer, National Faceless Assessment Centre, Delhi (here in after referred to as ‘ld. AO’). Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.
2. Though the assessee has raised several grounds before us, the only identical issue to be decided in all these appeals is as to whether the Learned AO was justified in framing of re- assessment under section 147 of the Act by applying the old provisions of the Act i.e as it stood upto 31.3.2021 in the facts and circumstances of the instant case.
3. We have heard the rival submissions and perused the materials available on record. The assessee is a salaried employee and has been regularly filing his Returns of Income. The case of the assessee was sought to be reopened by the Learned AO under section 147 of the Act on the basis of information received from DCIT, Central Circle- 26 and accordingly a notice under section 148 of the Act dated 31-3-2021 has been issued to the assessee on 1-4- 2021 vide email at 7.20 a.m.. The evidence of notice under section 148 of the Act being issued to the assessee by email is enclosed in page 5 of the paper book. The notice issued by the Learned AO under section 148 of the Act dated 31-3 -2021 issued to the assessee on 1-4-2021 ultimately culminated in framing of reassessment order under section 147 of the Act dated 28-3- 2022. This goes to prove that the Learned AO had framed the entire reassessment order under the old provisions of the Act as it stood prior to 1-4-2021 under section 1 47 of the Act even though notice under section 148 of the Act was issued to the assessee on 1-4-2021.
4. The assessee has raised an additional ground challenging the validity of reassessment per se as bad in law. This additional ground goes to the root o f the matter and facts relevant for its adjudication are already placed on record. Hence the additional ground filed by the assessee is hereby admitted and taken up first for adjudication. We find that the Finance Act 2021 has brought significant amendment s to the reassessment scheme by amending sections 147 to 151 of the Act by inserting a new section 148A of the Act with effect from 1 -4- 2021. The Hon’ble Supreme Court in the case of Union of India vs Ashish Agarwal reported in 138 taxmann.com 64 (SC) dated 4-5- 2022 held that any notice served post 1-4-2021 under the old law is non- est and unenforceable and therefore by invoking the special powers under Article 142 of the Constitution of India, converted all the notices issued under section 148 of the Act on or after 1-4-2021 under the unamended provisions to the show- cause notice under section 148A(b) of the amended provisions. The Hon’ble Supreme Court further clarified that the learned AO must follow the new procedure prescribed under section 148A of the Act.
5. In the instant case, the notice under section 148 of the Act was issued to the assessee on 1-4- 2021 without resorting to the amended provisions prescribed under section 148A of the Act. The short point that arises for our consideration is as to whether the notice under section 148 of the Act dated 31 -3-2021 issued to the assessee on 1-4-2021 by e- mail without following the mandatory provisions under section 148A of the Act would would have to be construed as bad in law and liable to be quashed o r not. In this regard, the learned AR placed reliance on the decision of Hon’ble Jurisdictional High Court in the case of Rajesh Chopra vs ITO reported in 2025 (6) TMI 83 (Del HC) in W.P. (C) 12561/2022 dated 28-5- 2025. In that case, notice under section 148A(b) of the Act was issued on 30-5- 2022 calling the petitioner to file a reply on or before 13-06- 2022. The petitioner in that case stated that for assessment year 2013-14, the time limit for framing the re- assessment order had expired on 31-03-2022 being the period of 12 months from the date on which the notice under section 148 of the Act was initially issued. The Revenue Authorities in that case claimed that the notice under Section 148 of the Act dated 31-3-2021 was in fact issued on 1-4-2021 and t herefore is required to be treated as a show- cause notice under Section 148A(b) of the Act in terms of the decision of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal referred supra. In that case also, the notice under Section 148 of the Act dated 31-3-2021 was despatched to that petitioner by e-mail on 1-4- 2021 at 7:30:47 AM and delivered at 7:30:48 AM. In those facts and circumstances, the Hon’ble Delhi High Court held as under:-
“17. Section 149(1) of the Act proscribes issuance of notice beyond the period as stipulated in the said section. In Suman Jeet Agarwal v. Income Tax Officer and Ors.: (2022) 449 ITR 517, the Coordinate Bench of this Court had considered the question regarding as to the date of issue of a notice under Section 148 of the Act for ascertaining the period of limitation for issuance of such a notice. We consider it apposite to refer to the following extracts of the said decision:
“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 dispatching 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?
25.1. It has emerged as an admitted position on facts, that the e- mails attaching the impugned notices dated March 31, 2021, were despatched by the Income Tax Business Application servers on April 1, 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 Income Tax Business Application portal on March 31, 2021, is undisputed, the singular act of generation of notice by t he jurisdictional Assessing Officer satisfies the requirement of “issued” for the purpose of section 149 of the Act of 1961 and despatch of the notice on March 31, 2021 is not a mandatory requirement.
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25.12. The review of the aforesaid judgments of the Supreme Court and the several High Courts shows that all courts have consistently held that the expression “issue” in its common parlance and its legal interpretation means that the issuer of the notice must after drawing up the notice and signing the notice, make an overt act to ensure due despatch of the notice to the addressee. It is only upon due despatch, that the notice can be said to have been “issued”.
25.13. Further, a perusal of the compliance affidavit reveals that while the function of gene ration of notice on Income Tax Business Application portal and digital signing of the notice is executed by the jurisdictional Assessing Officer, the function of drafting of the e- mail to which the notice is attached and triggering the e-mail to the assess ee is performed by the Income Tax Business Application e- mail software system. Thus, mere generation of notice on the Income Tax Business Application screen cannot in fact or in law constitute issue of notice, whether the notice is issued in paper form or electronic form. In case of paper form, the notice must be despatched by post on or before March 31, 2021 and for communication in electronic form the e- mail should have been despatched on or before March 31, 2021. In the present writ petitions, the despatch by post and e- mail was carried out on or after April 1, 2021 and therefore, we hold that, the impugned notices were not issued on March 31, 2021.
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25.18. Additionally, the contention of the counsel for the Department that generation of section 148 notice on the Income Tax Business Application screen amounts to “issued” within the meaning of section 149 of the Act of 1961 is not borne out from the instructions issued by the Directorate of Income- tax (Systems). On the contrary, the said circulars duly recognize that after generation of notice the concerned Income- tax authority is required to take overt steps for issuing the said notice to the assessee. The circulars use the words “generation” and “issuance” distinctively. In this regard reference ma y be made illustratively to the following instructions:
(a) The Income Tax Business Application Assessment Instruction No. 2 (F. No. System/Income Tax Business Application/Instruction/Assessment/ 16-17/177, dated August 1, 2016) issued by the Directorate of Income -tax (System) mentions that:
“the Assessing Officer Staff/Assessing Officer Inspector will not be able to generate the notice but will be able to view the notices already generated by the Assessing Officer for taking a printout of the same, for issue to the assessee.”
(b) The Income Tax Business Application Assessment Instruction No. 3 (F No. System/Income Tax Business Application/Instruction/Assessment/ 177/16- 17/), dated February 3, 2017, also illustrates the same distinction:
“Details of t he Authority/party from whom information is requisitioned can be entered along with 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 document identification number on Income Tax Business Application screen conclusively indicates that the notice has been irrevocably issued. The submission of the respondent is not borne out from the applicable circular regarding document identification number issued by Central Board of Direct Taxes and is therefore a mereipsedixit of the counsel.
25.20. As per Circular No. 19 of 2019 (F. No. 225/95/2019- ITA.II), dated August 14, 2019 ([2019] 416 ITR (St.) 140) issued by the Central Board of Direct Taxes, th e document identification number was introduced to maintain a proper audit of trail of communications issued by the Income- tax authority. The said circular does not state that the generation of document identification number would automatically constitute issuance of the notice. Relevant extract from the aforementioned circular is reproduced as under (page 140 of 416 ITR (St.):
“… However, it has been brought to the notice of the Central Board of Direct Taxes (the Board) that there have been some insta nces in which the notice, order, summons, letter and any correspondence (hereinafter referred to as ‘communication’) were found to have been issued manually, without maintaining a proper audit trail of such communication.
2. In order to prevent such insta nces and to maintain proper audit trail of all communication, the Board in exercise of power under section 119 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’), has decided that no communication shall be issued by any Income- tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person, on or after October 1, 2019 unless a computer- generated document identification number (DIN) has been allotted and is duly quoted in the body of’ such communication.” (emphasis supplied)
In fact, in several cases, we take judicial notice that even as on date the jurisdictional Assessing Officers issue notices which do not have document identification number and in those cases the Department contends that the absence of the document identification number does not make those notices invalid.”
18. Clearly, the date of notice is vital for determining the rights of the parties and there can be no uncertainty regarding the date of issuance of notice. It is, thus necessary that the date of issue of notice be ascertained on completion of the precise steps for issuance of the notice. In terms of the decision of this Court in Suman Jeet Agarwal v. Income Tax Officer and Ors. (supra), as noted above, where the notice is sent electronically, the date of dispatch of the e- mail is to be considered as the date of issue of the notice. Thus, in this case the date of issue of notice would have to be taken as 01.04.2021.
19. As stated at the outset, if there is no dispute that the date of issuance of notice is considered as 01.04.2021, then the said notice was required to be treated as a notice under Section 148A(b) of the Act in terms of the decision of the Supreme Court in Union of India and Ors. v. Ashish Agarwal (supra).
20. It is material to note that a notice under Section 148 of the Act is a jurisdictional notice and issuance of such notice is necessary for the AO to assume jurisdiction to assess/re- assess the income under Section 147 vitiate the proceedings commenced pursuant thereto. Thus, merely because the parties had laboured under a misconception at the initial stage that the initial notice issued under Section 148 of the Act was valid, would not invalidate the subsequent steps taken by the Revenue in conformity with the decision of the Supreme Court in Union of India and Ors. v. Ashish Agarwal (supra) as well as the decision of this Court in Suman Jeet Agarwal v. Income Tax Officer and Ors. (supra).
21. Viewed from another perspective, if an adverse re- assessment order was passed pursuant to the notice dated 31.03.2021 ( issued on 01.04.2021), the same would be vulnerable to a challenge by the Assessee on the ground that the proceedings were not in compliance with the directions issued by the Supreme Court in Union of India and Ors. v. Ashish Agarwal (supra).
22. In view of the above, we find it difficult to sustain the petitioner’s challenge in the present petition. The petition is, accordingly, dismissed.”
6. The case before us i.e. in the case of Mr Aseem Sehgal is exactly the reverse case. In the instant case before us, the notice under Section 148 of the Act dated 31-3-2021 was despatched to the assessee by e-mail on 1-4- 2021 at 7.20 AM and the reassessment was framed under the old provisions of Section 147 and 148 of the Act by the Learned AO. The Hon’ble Supreme Court in the case of Ashish Agarwal supra had clearly clarified that once a notice under Section 148 of the Act is issued on or after 1-4- 2021, the only recourse available to the assessing officer is to frame the re- assessment in accordance with the amended provisions and procedures laid down in Section 148A of the Act. In the instant case, the reassessment has been framed under the old provisions of the Act by the Learned AO on 28-3- 2022. Respectively following the aforesaid decision of Hon’ble Delhi High Court in the case of Rajeev Chopra referred supra and Hon’ble Supreme Court in the case of Ashish Agarwal supra, we have no hesitation to quash the reassessment order dated 28-3-2022 as bad in law and void ab initio.
7. Since the reassessment is quashed as bad in law, the other grounds raised by the assessee need not be adjudicated as it would be academic in nature and hence they are left open.
8. In the result, all the appeals of the assessee are allowed.”
5. In view of the above observations and respectfully following the judicial precedent relied upon herein above, I hold that the reassessment framed on 25-3-2022 by applying the old provisions of section 147 to 151 of the Act is to be declared bad in law and void abinitio.
6. Since the reassessment is quashed, the adjudication of other factual and legal grounds raised by the assessee become academic in nature and they are left open.
7. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on 25th -August-2026.
