Facts of the Case

The petitioner, Grid Solutions SAS, filed a writ petition challenging the notice dated 30.03.2025 issued under Section 148A(1) of the Income-tax Act for Assessment Year 2019–20, the order dated 30.06.2025 passed under Section 148A(3), and the consequent notice dated 30.06.2025 issued under Section 148 initiating reassessment proceedings. The petitioner contended that although the notice under Section 148 was generated and digitally signed on the ITBA portal on 30.06.2025, it was actually dispatched and shared on the e-filing portal only on 01.07.2025, i.e., beyond the limitation period which expired on 30.06.2025.

During hearing, the Revenue admitted through instructions that while the notice was generated and signed on 30.06.2025 at night hours, due to a technical glitch it was uploaded on the assessee’s e-proceeding portal only after midnight on 01.07.2025 and emailed later the same day.

Issues Involved

Whether generation and digital signing of a reassessment notice on the ITBA portal before the limitation date amounts to “issuance” under Section 149, whether actual dispatch and communication of the notice after the limitation period renders the reassessment proceedings time-barred, and whether delay attributable to the ITBA system can be excluded while computing limitation.

Petitioner’s Arguments

The petitioner argued that reassessment proceedings were barred by limitation as the notice under Section 148 was not dispatched or communicated before 30.06.2025. It was contended that issuance of notice requires an overt act of dispatch and not merely generation or signing on the ITBA portal. Reliance was placed on the decision of the Delhi High Court in Suman Jeet Agarwal vs Income Tax Officer, Ward 61(1), where it was held that notices dispatched after the cut-off date are time-barred even if generated earlier.

 

 Respondent’s Arguments

The Revenue submitted that the notice was generated and digitally signed on the ITBA portal on 30.06.2025 and that the subsequent delay in uploading or emailing the notice was due to a technical glitch. It was contended that such delay should not invalidate the reassessment proceedings.

Court Order / Findings

The Delhi High Court examined the admitted factual position and noted that the notice was shared on the assessee’s e-filing portal and emailed only on 01.07.2025, after expiry of the limitation period. Relying on the judgment in Suman Jeet Agarwal, the Court reiterated that “issuance” of notice requires due dispatch and that time taken by the ITBA system in dispatching notices is attributable to the Department. The Court held that mere generation or signing of the notice on the portal before the limitation date does not satisfy the statutory requirement if actual dispatch occurs after the cut-off date. Since the Revenue failed to show anything contrary to the settled legal position, the reassessment proceedings were held to be barred by limitation.

Important Clarification

The Court clarified that for purposes of Section 149, issuance of a notice under Section 148 is complete only upon due dispatch to the assessee. Any delay in electronic transmission attributable to the Department or its systems cannot be used to save limitation, even if the notice is generated or digitally signed before the cut-off date.

Final Outcome

The writ petition was allowed. The notice dated 30.06.2025 issued under Section 148 of the Income-tax Act for Assessment Year 2019–20 and all consequential reassessment proceedings were set aside as being barred by limitation. Pending applications were disposed of as infructuous.

Link to Download order- https://mytaxexpert.co.in/uploads/1769502843_GRIDSOLUTIONSSASVsASSISTANTCOMMISSIONEROFINCOMETAXANR..pdf

 

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