Yella Vinod Kumar Vs DCIT (ITAT Bangalore)
Notice Uploaded on the Portal but Never Despatched: Bengaluru ITAT Quashes ₹1.14 Crore Reassessment
Summary: Can a reassessment survive merely because a notice under section 148 was generated and uploaded to the taxpayer’s e-filing account on the last day of limitation? The Bengaluru ITAT has held that, where the Department could not establish despatch of the notice or any real-time communication to the assessee, the reassessment lacked jurisdiction. The decision highlights the difference between a notice existing in the Department’s system and a notice being duly issued to the taxpayer.
Cash Deposits Led to Reopening
The assessee had not filed a return of income for AY 2015–16. Based on information that ₹1,14,49,815 had been deposited in cash into his ICICI Bank savings account at Ballari, the Assessing Officer initiated reassessment proceedings. A notice under section 148 was generated on 31 March 2021.
The assessee did not respond to the notices in the reassessment proceedings. The Assessing Officer completed the assessment under section 147 read with sections 144 and 144B, adding the entire cash deposit of ₹1,14,49,815. The assessee also remained non-compliant before the CIT(A), who upheld the addition in the absence of supporting evidence.
When the matter reached the Tribunal, the appeal was delayed by 62 days. After considering the condonation petition and affidavit, the Tribunal found sufficient cause, condoned the delay and proceeded to hear the appeal.
Assessee Challenges the Very Issuance of Notice
Before the Tribunal, the assessee raised an additional legal ground challenging the validity of the reassessment itself. His contention was that the notice dated 31 March 2021 had not been sent to any valid email address or otherwise communicated to him. According to the assessee, the material produced by the Revenue showed only that the notice had landed in his e-filing account through the ITBA/e-filing portal. The email copy relied upon by the Department, he argued, did not even identify a recipient’s email address.
The assessee also referred to an RTI application seeking information on service of the notice and the reasons recorded for reopening. He relied principally on the Delhi High Court decision in Suman Jeet Agarwal v. ITO, reported in (2022) 143 taxmann.com 11 (Delhi), to argue that generation of a notice does not, by itself, establish its issuance. If the notice had not been duly issued within time, the Assessing Officer could not assume jurisdiction to reassess the income.
The Tribunal admitted the additional ground because it went to the root of the reassessment proceedings. This meant that the validity of the notice had to be decided before examining whether the cash deposits were taxable.
Uploading and Despatch Are Different Acts
On examining the material placed before it, the Tribunal noted the Revenue’s position that the notice generated on 31 March 2021 had been uploaded to the assessee’s e-filing account through the ITBA/e-filing portal. The crucial gap was that the Revenue could not produce evidence that the notice had been served or that a real-time communication had been triggered to the assessee.
The Tribunal drew on Suman Jeet Agarwal, where the Delhi High Court explained that drawing up and signing a notice is not enough to constitute its “issue”. An overt act of despatch to the addressee is required. In the electronic process considered by the High Court, generation and digital signing of the notice by the Assessing Officer were distinct from the subsequent act of triggering the email through the ITBA software system.
Applying that reasoning, the Bengaluru ITAT held that the Department had failed to establish the necessary communication of the section 148 notice. It therefore quashed the reassessment order as being without jurisdiction. Having decided the appeal on this legal ground, the Tribunal found it unnecessary to adjudicate the grounds concerning the cash-deposit addition. The assessee’s appeal was allowed.
Author’s Comments
This decision is particularly relevant where a section 148 notice bears a date close to the limitation deadline. The date printed on the notice and the date on which it appears in the portal do not necessarily answer the question of whether it was duly issued. The supporting electronic record becomes important: what was despatched, when it was despatched, and to which destination?
At the same time, the ruling should be read in light of its specific evidentiary finding. The Tribunal did not hold that every notice uploaded to an e-filing account is invalid. It found that, in this case, the Revenue had not produced evidence of service or triggering of any real-time communication. The failure of proof was decisive. Where the Department can establish timely electronic despatch through appropriate records, the factual position may be different.
The order also illustrates the value of raising a jurisdictional ground even where the assessee has not responded during assessment or first appeal. Here, the non-compliance had led to a best-judgment addition of more than ₹1.14 crore. Yet the Tribunal first examined whether the proceedings had been validly initiated. Once it held that the foundational notice had not been duly issued, the merits of the cash deposits became academic for that appeal.
For taxpayers and practitioners reviewing an old reassessment, the practical exercise is therefore to examine the complete electronic trail, not merely a copy of the signed notice. The portal record, email details, recipient address, despatch timestamp and any contemporaneous communication may determine whether the notice crossed the legal threshold for issuance. In Yella Vinod Kumar, the Department could establish generation and upload, but not the required despatch or communication. That distinction brought down the entire reassessment.
Cases Discussed
- Suman Jeet Agarwal Vs. ITO (Delhi High Court) — (2022) 143 taxmann.com 11 (Delhi) — followed on the requirement of an overt act of despatch for a notice to be treated as “issued”.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal is filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals) NFAC, Delhi vide DIN: ITBA/NFAC/S/250/2025-26/1081628838(1) dated 10.10.2025 for the Assessment Year 2015-16, arising out of the Order passed under section 147 r.w.s. 144 r.w.s. 144B of the Act, dated 21.03.2022.
2. At the outset, it is noticed that assessee has filed appeal with a delay of 62 days. The assessee has submitted a petition for condonation of delay along with affidavit. On perusal of the same, we find that assessee has sufficient cause for filing the appeal belatedly before the Tribunal and hence we are inclined to condone the delay of 62 days and proceed to adjudicate the appeal on merits.
3. Briefly stated, the facts of the case are assessee has not filed return of income for the Assessment Year 2015-16. As per the information available, it was noticed that assessee has deposited cash amounting to Rs.1,14,49,815/- into the savings bank account maintained with ICICI Bank, Bellary, during the relevant Assessment Year 2015-16. The learned AO, after recording the reasons and after obtaining due approval from the competent authorities, issued a notice under section 148 of the Act on 31.03.2021. The notice was duly served on the email Id of the assessee registered in the e-filing portal. The assessee failed to respond to any of the notices and the learned AO therefore has no option, but to frame the Assessment under section 144 of the Act. He made an addition of Rs.1,14,49,815/-.
4. On being aggrieved by the Order of the learned AO, assessee filed appeal before the learned CIT(A). Even before the learned CIT(A), assessee remained non-compliant and the learned CIT(A), therefore, in the absence of any credible evidence, upheld the Order of the learned AO while dismissing the appeal of the assessee.
5. On being aggrieved by the Order of the learned CIT(A), assessee is in appeal before us by raising various grounds. Assessee also filed petition for admission of additional grounds which reads as follows:
“2. The reassessment proceedings are bad in law as the notice u/s. 148 dated 31.03.2021 was not at all served/ sent by the department to any valid email Id and hence, the learned assessing officer has not assumed proper jurisdiction and the entire reopening is bad in law on the facts and circumstances of the case.”
6. The learned AR submitted that the additional ground which is legal in nature shall be adjudicated at first since it challenges the proceedings issue under section 148 of the Act. He submitted that the learned AO issued notice under section 148 of the Act dated 31.03.2021 but has not served to the assessee. He submitted that as per the email furnished by the Revenue, the notice under section 148 of the Act dated 31.03.2021 has been directly landed in the e-filing account of the assessee through ITBA e-filing portal. He also further submitted that the email alleged to have been sent by the learned AO does not have the receiver’s Id. The copy of the email is available in Paper Book Page No.1. The learned AR also submitted that the assessee filed RTI application seeking information regarding the service of notice and the reasons recorded for satisfaction for issue of notice under section 148 of the Act. He also submitted that no real time communication was sent to the assessee regarding issuance of notice under section 148 of the Act. The learned AR placed heavy reliance in the case of Suman Jeet Agarwal Vs. ITO by the Hon’ble High Court of Delhi reported in (2022) 143 taxmann.com 11 (Delhi). He therefore prayed that the reassessment order under section 147 r.w.s. 144 of the Act shall be quashed as it is without jurisdiction.
7. Per contra, the learned DR relied on the orders of the lower authorities.
8. We have heard both the sides. We admit the additional ground raised by the assessee, since it goes to the root of the matter. On perusal of the email submitted by the Revenue regarding the date of issue and service of notice under section 148 of the Act, it has been admitted by the Revenue that notice generated on 31.03.2021 has been uploaded to the e-filing account of the assessee through ITBA / e-filing portal. The Revenue could not submit any evidence that the notice under section 148 of the Act dated 31.03.2021 was served on the assessee or any real time communication was sent to the assessee. In the case of Suman Jeet Agarwal Vs. ITO (supra) relied on by the learned CIT(A), the Hon’ble High Court in paragraphs 25.12, 25.13 and 26 held as follows:
“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 generation of Notice on ITBA portal and digital signing of the Notice is executed by the JAO, the function of drafting of the e-mail to which the Notice is attached and triggering the e-mail to the assessee is performed by the ITBA e-mail software system.
26. Question No. (II):Whether “despatch” as per Section 13 of the Act of 2000 is sine qua non for issuance of Notice through electronic mail for the purpose of section 149 of the Act of 1961?- The Court has answered this is in the affirmative, in favour of the assessee.
AND
Question No. (III): Whether the time taken by the ITBA’s e-mail software system on 31st March, 2021, in despatching the e-mails to the assessee is not attributable to the JAOs and the notices will be deemed to have been issued on 31st March, 2021? -The Court has answered this in the negative against the Department.”
9. In the instant case, no evidence was produced before us regarding the service of notice to the assessee or triggering of the real time message to the assessee. Therefore, respectfully following the decision of Hon’ble High Court in the case of Suman Jeet Agarwal Vs. ITO (supra), we are of the view that the reassessment order passed under section 147 r.w.s. 144 of the Act is without jurisdiction and deserves to be quashed. The adjudication of other grounds raised on merits are merely academic in nature and hence dismissed.
10. In the result, appeal of the assessee is allowed.
Pronounced in the open court on the date mentioned on the caption page.
