Delhi HC to decide on validity of Section 148 E-notices – Stays reassessment notices

Sharad Garg Vs ITO (Delhi High Court)

By way of the present batch of petitions, this Court has been called upon to decide the validity of E-notices issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The Petitioners have classified the matters in the following categories:

1. Category A: is in respect of writ petitions where Notice is dated 31^st March, 2021 or before but digitally signed on or after 1st April, 2021, however sent and received on or after 1st April, 2021.

2. Category B: is in respect of writ petitions where Notice is dated 31^st March, 2021 or before, digitally not signed, however sent and received on or after 1st April, 2021.

3. Category C: is in respect of writ petitions where Notice is dated 31^st March, 2021 or before, digitally signed on or before 31^st March, 2021, however sent and received on or after 1^st April, 2021.

4. Category D: is in respect of writ petitions where Notice is dated 31^st March, 2021 or before, digitally signed on or before 31^st March, 2021, no service either by e-mail or by post or any other mode and assessee came to know later on through Portal or receipt of subsequent notice under Section 142(1).

5. Category E: is in respect of writ petitions where Notice is dated 31^st March, 2021 or before, manually signed, no service by e-mail but dispatched through speed post on or after 1^st April, 2021.

It is pertinent to mention that the Allahabad High Court in Daujee Abhushan Bhandar Pvt. Ltd. vs. Union of India and 2 Others, Writ Tax No.78/2022 has held as under:-

“               xxx                   xxx                        xxx

……… Section 13(1) of the Act, 2000 provides that unless otherwise agreed, the dispatch of an electronic record occurs when it enters into computer resources outside the control of the originator. Thus, the point of time when a digitally signed notice in the form of electronic record is entered in computer resources outside the control of the originator i.e. the assessing authority that shall the date and time of issuance of notice under section 148 read with Section 149 of the Act, 1961.

In view of the discussion made above, we hold that mere digitally signing the notice is not the issuance of notice. Since the impugned notice under Section 148 of the Act, 1961 was issued to the petitioner on 06.04.2021 though e-mail, therefore, we hold that the impugned notice under section 148 of the Act, 1961 is time barred. Consequently, the impugned notice is quashed.

………….”

Keeping in view the aforesaid judgment, this Court is of the view that the present batch of matters requires detailed examination.

As the deadline for passing the assessment order in most of the cases is 31^st March, 2022, this Court is of the view that it would not be possible to pass a judgment prior thereto. Accordingly, proceedings pursuant to the impugned reassessment notices are stayed till further orders.

List on 11 ^th April, 2022.