DHARMICHAND PRAMOD KUMAR,KOLAR vs. INCOME TAX OFFICER, WARD-1, , KOLAR

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ITA 2667/BANG/2025Status: DisposedITAT Bangalore05 October 20266 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 of the Act in the present case must be treated as having been issued on 01.04.2021. The Tribunal noted that while the notice bore the date 31.03.2021 and was digitally signed on that date, the material placed by the assessee showed its receipt on the ITBA portal on 01.04.2021. Following the judgment of the Hon'ble Bombay High Court in Shreenath Finstock (P.) Ltd. v. Union of India, the Tribunal reasoned that the date of digital signature or the internal receipt registry does not establish the date of issuance when the electronic record shows transmission and receipt on a later date. The delay in triggering the transmission through the ITBA system is attributable to the Department. Consequently, the reassessment completed under the unamended provisions of Section 147 and 148 could not be sustained, as it should have been dealt with under the substituted reassessment regime effective from 01.04.2021. The reassessment order dated 29.03.2022 was set aside. The grounds relating to the addition on merits were left open as they did not require adjudication.

What were the facts?

The assessee, Dharmichand Pramod Kumar, Prop. Goutham Jewellers, filed an appeal against the order of the CIT(A) for Assessment Year 2013-14. The Assessing Officer (AO) reopened the case based on information regarding cash deposits of Rs. 1,98,44,924/-. The AO completed reassessment under Section 147, making an addition of Rs. 1,98,44,924/- under Section 69. The assessee challenged the reassessment proceedings, arguing that the notice under Section 148, though dated and digitally signed on 31.03.2021, was only received through the ITBA portal on 01.04.2021. The CIT(A) did not adjudicate this legal ground and confirmed the addition on merits. The assessee is now before the ITAT.

What were the issues?

1. Whether the reassessment proceedings are valid when the notice under Section 148 of the Income Tax Act, 1961, though dated and digitally signed on 31.03.2021, was dispatched and received by the assessee through the ITBA portal only on 01.04.2021, thus challenging the applicability of unamended provisions. Assessee's Contention: The assessee argued that the notice was received on 01.04.2021, and therefore, it cannot be treated as having been issued on 31.03.2021 under the unamended provisions. They relied on the judgment of the Hon'ble Bombay High Court in Shreenath Finstock (P.) Ltd. v. Union of India, which held that a notice received on 01.04.2021 should be treated as issued on that date. Revenue's Contention: The revenue contended that the notice was issued on 31.03.2021 at 6:05 PM and digitally signed at 5:58 PM on the same date. They relied on the receipt registry dated 31.03.2021 to argue that the notice was issued within time.

Which sections of the Income-tax Act were involved?

Section 148,Section 250,Section 147,Section 69,Section 148A(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Respondent: MD JCIT

PER SHRI WASEEM AHMED, ACCOUNTANT MEMBER: The present appeal filed by the assessee pertaining to A.Y. 2013-14 is directed against the order of the Ld. Commissioner of Income Tax (Appeals) [hereafter, the Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (hereafter, the Act) dated 08.09.2025.

2.

In the memo of appeal, the assessee has raised various grounds of appeal. However, the effective issue arising from the grounds is whether the reassessment proceedings are valid when the notice u/s 148 of the Act, though dated and digitally signed on 31.03.2021, was dispatched and received by the assessee through the ITBA portal only on 01.04.2021. The assessee has challenged the reassessment on the ground that such notice could not be treated as having been issued on 31.03.2021 under the unamended provisions of the Act.

3.

The brief facts of the case are that the assessee is an individual who filed its return of income declaring total income of Rs. 3,20,727/-. Subsequently, based on information relating to cash deposits of Rs. 1,98,44,924/-, the assessee's case was reopened. The AO completed the reassessment u/s 147 of the Act vide order dated 29.03.2022 and made an addition of Rs. 1,98,44,924/- u/s 69 of the Act.

4.

Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A). Apart from challenging the addition on merits, the assessee raised a legal ground challenging the validity of the reassessment proceedings. The assessee contended that though the notice u/s 148 of the Act was dated 31.03.2021, the same was received on the ITBA portal only on 01.04.2021. Therefore, the reassessment could not have been completed by following the unamended provisions applicable prior to 01.04.2021.

5.

The Ld. CIT(A), however, did not adjudicate the aforesaid legal ground raised by the assessee and proceeded to decide the addition made by the AO on merits confirming the same. Being aggrieved, the assessee is in appeal before us.

6.

Before us, the Ld. AR reiterated the legal objection raised before the Ld. CIT(A). The Ld. AR drew our attention to the screenshot of the ITBA portal and submitted that the notice u/s 148 of the Act was received by the assessee only on 01.04.2021. It was submitted that though the notice bears the date 31.03.2021 and the digital signature was affixed at 5:58 PM, the notice was transmitted through the system only on 01.04.2021. Therefore, the date of digital signature cannot by itself be considered as the date of issuance of notice.

6.1 The Ld. AR placed reliance on the recent judgment of the Hon'ble Bombay High Court in Shreenath Finstock (P.) Ltd. v. Union of India [2026] 189 taxmann.com 429 (Bombay), dated 06.07.2026. It was submitted that the facts of the said case are substantially similar to the present case. In that case also, the notice u/s 148 of the Act was dated and digitally signed on 31.03.2021 but was dispatched and received through the system on 01.04.2021. The Hon'ble High Court held that the notice was to be treated as having been issued on 01.04.2021 and consequently the reassessment could not proceed under the unamended provisions of the Act.

7.

The Ld. DR, on the contrary, vehemently supported the orders of the lower authorities and also filed written submissions dated 20.08.2026. The Ld. DR submitted that the notice u/s 148 of the Act was issued on 31.03.2021 at 6:05 PM and was digitally signed at 5:58 PM on the same date. The Ld. DR also relied upon the receipt registry dated 31.03.2021 and submitted that the notice was issued within time.

8.

We have heard the rival submissions of both the parties and perused the materials available on record. The short question before us is whether the notice u/s 148 of the Act can be considered to have been issued on 31.03.2021 merely because it bears that date and was digitally signed on that date, when the screenshot of the ITBA portal relied upon by the assessee shows its receipt on 01.04.2021.

8.1 We note that the assessee had raised this legal objection before the Ld. CIT(A). However, the Ld. CIT(A) has not adjudicated this ground and has proceeded to decide the appeal on merits. Since the issue goes to the root of the validity of the reassessment proceedings and the relevant material is available before us, we proceed to adjudicate the same.

8.2 We find that the issue is directly covered by the recent judgment of the Hon'ble Bombay High Court in Shreenath Finstock (P.) Ltd. v. Union of India (supra). In that case, the notice u/s 148 of the Act was also dated 31.03.2021 and digitally signed on 31.03.2021. However, the system delivery report showed that the notice was sent and delivered on 01.04.2021. The Revenue contended that once the notice was digitally signed and uploaded on the ITBA portal on 31.03.2021, it had left the control of the AO and should therefore be treated as having been issued on that date. The Hon'ble High Court did not accept this contention. The relevant para of the said case is reproduced below:

“9. A similar issue came up before us in the case of Jose Kattadyil Joseph v. Asstt. CIT [Writ Petition No. 430 of 2023 (OS)] wherein we observed that the impugned Notice under Section 148 of the I.T. Act, though dated 31st March 2021, was deemed to be issued on 1st April 2021 (as it was digitally signed on 1st April 2021). The only material difference between the facts of the present case and that in Jose Kattadyil Joseph (supra) is that in Jose Kattadyil Joseph (supra), the impugned Notice was deemed to have been issued on 1st April 2021 on account of being digitally signed on 1st April 2021 whereas in this case, the impugned Notice is deemed to have been issued on 1st April 2021 on account of delay in triggering the dispatch of the impugned Notice. However, the fundamental issue to be decided by us remains the same and the further procedure to be followed by the Department in respect of the re- assessment has to be determined. 10. We find that the Hon'ble Supreme Court in Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64/286 Taxman 183/444 ITR 1 (SC) observed that Notices issued under the unamended law after 1st April 2021 shall be deemed to have been issued under Section 148A of the I.T. Act as substituted by the Finance Act, 2021 and treated to be Show Cause Notices in terms of Section 148A(b) of the Act. In this backdrop and following the directions of the Hon'ble Supreme Court in Ashish Agarwal (supra) we passed the following order in the case of Jose Kattadyil Joseph (supra): ************* 12. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs.” 8.3 From the above, we note that the Hon'ble Bombay High Court also referred to its earlier decision in Jose Kattadyil Joseph v. ACIT [Writ Petition No. 430 of 2023 (OS)], wherein the notice dated 31.03.2021 was treated as having been issued on 01.04.2021 since it was digitally signed on 01.04.2021. The Hon'ble High Court observed that the only material difference in Shreenath Finstock (P.) Ltd. (supra) was that the notice was treated as having been issued on 01.04.2021 due to the delay in triggering its dispatch through the ITBA system. The Hon'ble High Court held that the fundamental issue in both cases remained the same. Thereafter, following the judgment of the Hon'ble Supreme Court in Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64 (SC), the notice issued under the unamended provisions was treated as a show cause notice u/s 148A(b) of the Act and the Department was directed to proceed in accordance with the substituted reassessment provisions.

8.4 On comparison of the facts, we find that the principle laid down in Shreenath Finstock (P.) Ltd. (supra) squarely applies to the present case. Here also, the notice bears the date 31.03.2021 and was digitally signed on the same date. However, the material placed before us by the assessee shows receipt of the notice on the ITBA portal on 01.04.2021. Therefore, merely because the notice was prepared and digitally signed on 31.03.2021 would not establish that it was issued on that date. The relevant event is the dispatch of the notice through the electronic system.

8.5 We have also considered the written submissions of the Ld. DR and the reliance placed on the receipt registry dated 31.03.2021. However, in view of the principle laid down by the Hon'ble Bombay High Court in Shreenath Finstock (P.) Ltd. (supra), the date appearing on the notice, the time of digital signature or the internal receipt registry would not by themselves establish the date of issuance when the electronic record shows that the notice was transmitted and received through the ITBA system on 01.04.2021. The delay in triggering the transmission through the ITBA system is attributable to the Department.

8.6 We therefore hold that the notice u/s 148 of the Act in the present case has to be treated as having been issued on 01.04.2021. Once the notice is treated as having been issued on 01.04.2021, the reassessment could not have been completed by following only the unamended provisions of section 147 & 148 of the Act. The reassessment was required to be dealt with in accordance with the substituted reassessment regime which came into force with effect from 01.04.2021. The assessment order dated 29.03.2022 passed u/s 147 of the Act under the old reassessment procedure therefore cannot be sustained.

8.7 Accordingly, respectfully following the judgment of the Hon'ble Bombay High Court in Shreenath Finstock (P.) Ltd. v. Union of India (supra), we set aside the reassessment order dated 29.03.2022 passed u/s 147 of the Act. The legal ground raised by the assessee is accordingly allowed.

9.

Since the reassessment order itself has been set aside on the aforesaid legal ground, the grounds raised by the assessee relating to the addition of Rs. 1,98,44,924/- u/s 69 of the Act do not require adjudication and are therefore left open.

10.

In the result, the appeal filed by the assessee is partly allowed.

Order pronounced in the open court on 5th October, 2026

Sd/- Sd/- KESHAV DUBEY WASEEM AHMED JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore Dated: 5th October, 2025 Vms Copy to: DHARMICHAND PRAMOD KUMAR, PROP. GOUTHAM JEWELLERS, NO. 520, 1 BAAZAR STREET, BANGARPET, KOLAR, KOLAR-563114, KARNATAKA INCOME TAX OFFICER, WARD-1, , NO. 411, IT OFFICE, NEAR DOOM LIGHT 2 CIRCLE, NEW EXTENSION ROAD, KOLAR,, KOLAR-563101, KARNATAKA 3 THE PCIT / CIT, 4 THE D.R., ITAT, BANGALORE BENCH 5 GUARD FILE By Order

ASSISTANT REGISTRAR / I.T.A.T., BANGALORE P G Digitally signed by P G RAJANI RAJA Date: 2026.10.22 NI 15:55:19 +05'30'

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