Notice forms the core and heart of diverse tax proceedings undertaken pursuant to statutory ascendancy.Coupled with statutory vigour, it kick-starts and floats the course of assessments/compliances/prosecutions initiated with the ultimate conception of dissecting the subject to a cavernous extent. Ever since the monumental endorsement of `Digitization’ finding space in the budgetary orientation coupled with impressive focus on judicious propriety, there is a metamorphic change in the outlook governing the issuance and communication of notices. With greater transparency and clarity making strong inroads into the proceedings chaired by quasi-judicial authorities, any glitch in apposite issuance or service seems to have taken the authorities on a herculean ride. With the issuance and service of notice scaling down to comprehensive examination of judicial foras, any void in the legislation was required to be plugged and thus anticipated to be the need of the hour especially when the expressions `Electronic Mail’ and `Electronic Mail Message’ of section 66A of the Information Technology Act, 2008 (as amended) received severe beating at the hands of the Hon’ble Supreme Court, the principal arbiter of any discord between two litigating contestants.
Clause 109 of the Finance Bill, 2016 effective from 01st day of June, 2016 tabled in the Parliament by Hon’ble Finance Minister Sh. Arun Jaitely seeks to counter the licit deletion of the Explanation appended to section 66A of the Information Technology Act, 2008 thereby facilitating the issuance and communication of notices electronically and through digitized mode. In due reference to the proposal stretched out in the Finance Bill’ 2016, newly crafted sub section (1) of section 282A of the Income Tax Act, 1961 reads as under:-
`In Section 282A of the Income Tax Act, in sub-section (1), for the words “signed in manuscript by that authority” the words “signed and issued in paper form or communicated in electronic form by that authority in accordance with such procedure as may be prescribed” shall be substituted with effect from the 1st day of June, 2016.
Prior to the above said proposed amendment statured through the corridors of electronic form, the aged sub-section read as under:-
`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 in manuscript by that authority’.
The expressions`Electronic Form’as stipulated for in the so called proposed amendment to section 282A cannot be read in isolation from the expressions `Electronic Mail’ and `Electronic Mail Message’as appended to Explanation 282 to the Income Tax Act, 1961 borrowing inference from the Explanation subjoined to section 66A of the Information Technology Act, 2008 (as amended from time to time). Section 282 which speaks of Service of notice generally stands witnessed to Explanation which reads – `For the purposes of this section, the expressions “electronic mail” and “electronic mail message” shall have the meanings as assigned to them in Explanation to section 66A of the Information Technology Act, 2000 (21 of 2000). It becomes important to state what prudent effects does the term explanation possess and how it alters the character of the charging section towards the subject in words of the Hon’ble Supreme Court verdict in the case of SundaramPillai vs. Pattabiraman, (1985) 1 SCC 591, p. 613, An explanation to a statutory provision sustains:-
(a)to explain the meaning and intendment of the Act itself;
(b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve,
c)to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful;
(d) an explanation cannot in any way interfere with or change the enactment or any part thereof but where gap is left which is relevant for the purpose of the explanation, in order to suppress the mischief and advance the object of the Act, it can help or assist the court in interpreting the true purport and intendment of the enactment; and
(e) it cannot, however, take away a statutory right with which any person , under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same.
The above said passage completely highlights that the purpose of an explanation is to further explain the razor sharp intendment of the statutory provision thereby becoming a part and parcel of the enactment.
Latent And Patent Defect In Service Of Notice Electronically
In view of the Centralized Processing of Returns scheme launched by the Central government accompanied by the due issuance of Notification under section 143(1B) of the Income Tax Act, 1961 dated 04th January, 2012, the process to generalize service of notices has been streamlined and it would be most vital to have a referral to the operative provisions concerning the same which reads:-
The Provisions of section 282 of the Act shall apply to all returns received under the Centralized Processing of Returns Scheme, 2011 subject to the following, namely : –
(i) The service of a notice or order or any other communication by the Centre may be made by
(a) sending it by post;
(b) delivering or transmitting its copy thereof, to the person’s e-mail address by the Centre’s e-mail;
(c) placing its copy in the my account menu of the person on the official website for e-filing of returns; or
(d) any of the modes mentioned in section 282(1) of the Income-tax Act.
(ii) The date of posting of any such communication on the website, e-mail or other electronic medium shall be deemed to be the date of service.
(iii) The intimation, orders and notices shall be computer generated and need not carry physical signature of the person signing it.
The above Centralised Processing of Returns Scheme, 2011 clearly propagates, precipitates and propels the service of notice or order or any other communication to be effected via transmitting the copy thereof to the person’s email address which in other words can be designated as service through `electronic mail’ and `electronic mail message’,the meaning of which have been borrowed by the meaning construed under the Information Technology Act, 2000 (as amended thereof). On a bare perusal of the language of Section 2(1)(t) and Explanation appended to Section 66A of the Information Technology Act, 2000, the term `Electronic Record’, `Electronic Mail’ and `Electronic Mail Message’ stood defined as under:-
2 (I) In this Act, unless the context otherwise requires,-
(t)`Electronic Record” means data, record or data generated, image or sound stored, received or sent in an electronic form or micro film or computer generate micro fiche;
Explanation to Section 66A of the Information Technology Act, 2000 (as amended)
Explanation- For the purpose of this section, terms “Electronic Mail” and “Electronic Mail Message” means a message or information created or transmitted or received on a computer, computer system, computer resource or communication device including attachments in text, image, audio, video and any other electronic record, which may be transmitted with the message.
As a consequent measure of coming into force of the Centralized Processing of Returns Scheme, 2011, the Income Tax department stood empowered through the cannons of delegated legislation to service notice or requisition or order or summon or any other communication under the Income Tax Act, 1961 through electronic channels commonly referred to as the electronic servicing of notice upon the assessee or the subject under its lens. The terms `Electronic mail’ and `Electronic mail message’ have been now subject to a titanic evaporation in lieu of the Judgement pronounced by the Hon’ble Supreme Court of India in a case titled ShreyaSinghal vs. Union of India, Writ Petition (Criminal) No.167 of 2012 in which it is established in Sub Para (a) of Paragraph No.119, `That Section 66A of the Information Technology Act, 2000 is Struck down in its entirety being violative of Article 19(1)(a) and not saved under Article 19(2) of the Constitution.’ Hence leading to a discernable and definite conclusion that the very operation of Section 66A got ceased from the doctrinal phraseology of Information Technology Act, 2000 (as amended thereof).It is a cardinal and sacramental rule of construction that it is the `Explanation’ which elucidates the meaning of the section embedded in the womb of a statute.
When the entire section stood struck by the Hon’ble Supreme Court of India in a far reaching judgement as violative of the pious and reverent provisions relating to the fundamental rights contained in Part III of the Constitution, there cannot be by any figment of imagination held that the Explanation can survive and the same by itself would be reduced to nothing more than a nullity and void ab initio without having any legs to stands on its own. First Explanation appended to Section 282 construes the meaning of the expressions `Electronic Mail’ and `Electronic Mail Message’ as having due attribution to the meanings assigned to them under the explanation appended to section 66A of the Information Technology Act, 2000 (as amended) therefrom, as becomes writ clear and manifestly apparent that the service of the impugned notices or summons or requisitions or orders or any other form of communication under the Income Tax Act, 1961 electronically would be reckoned as ultra vires the constitution and hence the very operative part of such notices, summons, requisitions or orders or any form of communication under the Income Tax Act, 1961 serviced electronically through the passage of `Electronic Mail’, `Electronic Mail Message’ will not survive the test prescribed for legally servicing the notice as required until and unless, the Income Tax Department resorts to an early amendment in the body of section 282 by resorting to a clarification what meaning would be attached and assigned to the expressions called `Electronic Mail’ and `Electronic Mail Message’ under the Income Tax Act, 1961 when serviced electronically through the gateway of email addresses of the assesses. The very fact that the term `Electronic Record’ as mentioned and referred to in clause (c) of Sub Section (1) of Section 282 will continue to have its say and will be in due conformity with the provisions concerning the service of notice electronically and legally will not survive as the expression `Electronic Record’ as apparent from its definition is more or less parimateria which is a cardinal principle of rule of construction and synonym with its sisters expressions namely `Electronic Message’ and `Electronic Mail Message’ as defined under the Information Technology Act (as amended) thereof.
Service of notice, summons, requisition, order and other communication, dated 02nd December, 2015 – Regarding
Rule 127 of the Income Tax Rules, 1962 provides,
(1) For the purposes of sub-section (1) of section 282, the addresses (including the address for electronicmail or electronic mail message) to which a notice or summons or requisition or order or any othercommunication under the Act (hereafter in this rule referred to as “communication”) may be delivered ortransmitted shall be as per sub-rule (2).
(2) The addresses referred to in sub-rule (1) shall be-
(a) for communications delivered or transmitted in the manner provided in clause (a) or clause (b) of subsection(1) of section 282-
(i) the address available in the PAN database of the addressee; or
(ii) the address available in the income-tax return to which the communication relates; or
(iii) the address available in the last income-tax return furnished by the addressee; or
(iv) in the case of addressee being a company, address of registered office as available on the websiteof Ministry of Corporate Affairs:
Provided that the communication shall not be delivered or transmitted to the address mentioned in item
(i) to (iv) where the addressee furnishes in writing any other address for the purposes of communication to the income-tax authority or any person authorised by such authority issuing the communication;
(b) for communications delivered or transmitted electronically-
(i) email address available in the income-tax return furnished by the addressee to which the communication relates; or
(ii) the email address available in the last income-tax return furnished by the addressee; or
(iii) in the case of addressee being a company, email address of the company as available on the website of Ministry of Corporate Affairs; or
(iv)any email address made available by the addressee to the income-tax authority or any person authorised by such income-tax authority.
(3) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall specify the procedure, formats and standards for ensuring secure transmission of electronic communication and shall also be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to such communication.”
It becomes a settled proposition that section 282A is to be read as part and parcel of section 282 of the Income Tax Act, 1961. Section 282 places discriminatory reliance upon the infructuous explanations speeding to create a grey area for the issuance and service of summons/notices. However, in letter and spirit what comes out as a conclusive reasoning is that sub-section (1) of section 282A wholly supports the cause of issuance of summons in electronic form as an alternative medium to communication in paper form. The said proposed amendment seeks to sit over the Supreme Court Judgement in ShreyaSinghal vs. Union of India, Writ Petition (Criminal) No.167 of 2012in clarifying the issuance and communication of notices through e-route. But to the bitterness, ignoring the landmark judgementof the Hon’ble Supreme Court of India titled as BehramkhurshidPesikala vs. State of Bombay, AIR 1955 SC 123in which the Hon’bleCourt has appreciated by building due inference from Cooley’s, A Treatise on Constitutional Limitations, Vol.I, p.82, “Where a Statute is adjudged to be unconstitutional, it is as if it had never been. Rights cannot be built up under it; contracts which depend upon it for their consideration are void; it constitutes a protection to no one who has acted under it and no one can be punished for having refused obedience to it before the decision was made. And what is true of an Act void in toto is true also as to any part of an Act which is found to be unconstitutional and which consequently has to be regarded as having never at any time been possessed of any legal force………..”Concerning the effect of the same judgement, the Hon’bleSupreme Court also appreciated Willis on Constitutional Law at Page No. 89 , `A judicial declaration of the unconstitutionality of a statute neither annuls nor repeals the statute but has the effect of ignoring or disregarding it so fact as the determination of the rights of private parties is concerned. The courts generally say that the effect of an unconstitutional statute is nothing. It is as though it had never been passed………”
Legalized and the kosher service of notices, summons, requisitions, orders or any other communication by whatever name called must be duly supported by the authentic channels in order to pave way for a legalized proceedings to take effect under the purview of Income Tax Act, 1961. Any improper, illegal, indecorous, ill-bred servicing of notice goes to the inception of jurisdiction of the assessing authority and if challenged ruptures and fractures the very sound principalities of sitting upon the proceedings which does not have any concrete premise to bank upon. What is the requirement of the day is instead of negating and putting up the issue of legality of service in cold storage, due efforts must be made by the revenue authorities not to expand, extend and contest their rancorous lapse and to extend their full cooperation in not taking recourse to any alternatives available which might not be of any sound help and credit to them. In so far as the lacerating of section 66A of the Information Technology Act, 2000 by the Hon’ble Supreme Court of India is concerned as violative of fundamental rights contained in the constitution, the words whereof are imported in the Income Tax Act, 1961 under the explanation appended to section 282 which provides a generic procedure for servicing generally. Now since, with the advent and introduction of amended sub-section (1) to section 282A of the statute, electronic communication of notices have now become a factual reality and paves way for bringing to light one of the pilot projects of the Union i.e. Digital Indiain this non adversarial tax regime.
(Article by – Advocate Sameer Bhatia, R/o, 158/2, Guru Teg Bahadur Nagar, Opposite Mata Gujri Park, Jalandhar – 144003, Punjab Contact Nos:- 9041304900 Email Address: email@example.com)