Facts of the Case

The petitioner, Rajesh Chopra, an individual resident of New Delhi, filed his return of income for Assessment Year 2013-14 on 08.08.2013 declaring total income of ₹20,59,151. A notice dated 31.03.2021 under Section 148 was issued and the petitioner filed a return in response on 07.04.2021. Thereafter, notices under Sections 143(2) and 142(1) were issued, and the petitioner participated in the proceedings; however, no assessment order was passed at that stage.

Subsequently, the Assessing Officer issued a notice dated 30.05.2022 under Section 148A(b) followed by an order dated 22.07.2022 under Section 148A(d) and a consequential notice under Section 148 for AY 2013-14. The petitioner challenged these proceedings on the ground of limitation under Section 149, contending that reassessment had become time-barred.

Issues Involved

Whether the notice dated 31.03.2021 under Section 148 was validly issued within limitation, whether the date of digital signing or the date of electronic dispatch determines the date of issuance, and whether the reassessment proceedings were liable to be governed by the Supreme Court decision in Union of India vs. Ashish Agarwal.

Petitioner’s Arguments

The petitioner argued that the notice under Section 148 was issued on 31.03.2021 and, therefore, the time limit for completion of reassessment expired on 31.03.2022. It was contended that subsequent notices issued under Section 148A in May 2022 were without jurisdiction and barred by limitation. The petitioner submitted that the decision in Ashish Agarwal was inapplicable, as the notice bore the date 31.03.2021 and the petitioner had already participated in reassessment proceedings initiated pursuant thereto.

Respondent’s Arguments

The Revenue contended that although the notice was digitally signed on 31.03.2021, it was dispatched and delivered to the petitioner by email and speed post only on 01.04.2021. Accordingly, the notice was required to be treated as issued on 01.04.2021 and thus fell squarely within the scope of the Supreme Court’s directions in Ashish Agarwal. Reliance was placed on ITBA delivery timestamps and affidavits confirming the date and time of dispatch.

Court Order / Findings

The Delhi High Court held that for the purpose of limitation under Section 149, the date of issuance of a notice is the date on which it is dispatched to the assessee and not merely the date of digital signing or generation on the ITBA portal. Relying on its earlier decision in Suman Jeet Agarwal vs. Income Tax Officer and the Supreme Court ruling in Ashish Agarwal, the Court held that since the notice dated 31.03.2021 was dispatched electronically and by post on 01.04.2021, it was deemed to have been issued on 01.04.2021.

Consequently, the notice was required to be treated as a deemed show cause notice under Section 148A(b), and the subsequent proceedings carried out by the Assessing Officer in conformity with Section 148A could not be faulted. The Court observed that issuance of a jurisdictional notice must be tested on actual dispatch and communication, and mere generation or digital signing does not constitute issuance.

Important Clarification

The High Court clarified that in cases of electronic issuance of notices, the determinative factor for limitation is the date and time of dispatch as recorded in the ITBA system. Notices digitally signed on or before 31.03.2021 but dispatched on or after 01.04.2021 are governed by the post-Finance Act, 2021 reassessment regime as interpreted in Ashish Agarwal.

Final Outcome

The writ petition was dismissed. The Delhi High Court upheld the validity of reassessment proceedings initiated against the petitioner and sustained the impugned notices and orders issued under Sections 148A and 148 of the Income-tax Act.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769677421_RAJESHCHOPRAVsINCOMETAXOFFICERWARD621DELHI.pdf

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