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Facts
The assessee failed to file an income tax return for AY 2013-14, despite having significant interest income. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 by issuing a notice under Section 148 on March 30, 2021. The assessee did not respond, leading to an ex-parte assessment order. The assessee's appeal to the CIT(A) was partly allowed.
Held
The Tribunal held that the notice under Section 148 and subsequent notices were merely uploaded to the e-proceedings portal and not effectively served on the assessee. Citing Delhi High Court and other judicial pronouncements, it was ruled that proper service of the Section 148 notice is a condition precedent for the validity of reassessment proceedings.
Key Issues
Whether reassessment proceedings under Section 147 are valid if the Section 148 notice and other notices were not properly served, but only uploaded to the e-filing portal without real-time alerts or transmission to the assessee.
Sections Cited
147, 148, 144, 148(1), 149, 282
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘B, NEW DELHI
Before: SH. S. RIFAUR RAHMAN & SH. SUDHIR KUMAR
ORDER
PER SUDHIR KUMAR, JM:
This appeal by the Assessee against the order dated 25.3.2025 of the National Faceless Appeal Centre (NFAC), Delhi. Assessment was framed by the ITO, Ward 4(1), Gurgaon for the assessment year 2013-14 u/s. 144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) vide order dated 27.3.2022.
The assessee filed the application to admit the following additional grounds of appeal:-
1. That on facts, and in the circumstances of the case and in law, the assessee denies the service of the notices including the preliminary jurisdictional section 148 notice generated by the AO because all the notices are uploaded in E-filing portal without any real time alert and neither transmitted electronically by using email id nor physically send by post, thus the jurisdiction assumed by the AO for concluding the assessment without ensuring service of the notices upon the assessee may kindly be held as bad in law, accordingly, it is requested to quash the reassessment order dated 26.3.2022 passed u/s. 147 r.w.s. 144.
2. That without prejudice to the grounds of appeal no. 1 raised above, it is objected that the AO is erred in concluding the assessment order under the un-amended provisions of section 147 valid upto 31.3.2021 without verifying the date when the preliminary section 148 jurisdictional notice uploaded in E-filing portal was viewed by the assessee and in the present case section 148 was uploaded on 30.3.2021, thus the date of viewing the section 148 notice may be on or after 1st April, 2021 accordingly the reassessment order dated 26.3.2022 passed under the unamended provisions of section 147 is vitiated in law and liable the quashed.” 2.1 It was submitted that the above additional grounds of appeal are purely legal in nature and goes to the root of the matter and can be taken as additional grounds at any stage of proceedings and even before the ITAT for the first time and are emanating from the records available before the Tribunal. The legal grounds do not require any investigation and all materials are already on record before the Tribunal. It is further submitted that no prejudice will cause to revenue by admitting these legal grounds, since the revenue will be having a proper and reasonable opportunity of being heard on these issues. It was further submitted that in the absence of admission of above grounds, the assessee may suffer irreparable loss. In view of above, it is prayed that that the above
2 | P a g e additional grounds may kindly be admitted by relying upon the decision in the case of National Thermal Power Corporation Ltd. vs. CIT 229 ITR 383 (SC).
Heard both the sides and perused the records. We find that the above said additional grounds are purely legal and goes to the root of the matter, therefore, we admit the additional grounds for adjudication.
The brief facts of the case are that the assessee is an individual. The AO received information that the assessee had made time deposits of Rs. 6,93,00,000/- and received interest income amounting to rs. 34,79,870/- during F.Y. 2012-13 relevant to AY 2013-14. The assessee had not filed her return of income for AY 2013-14. The case was reopened u/s. 147 of the Act and notice u/s. 148 of the Act was issued to the assessee on 30.3.2021. In response to the said notice, the assessee did not file here income tax return. The assessee did not make any compliance during the assessment proceedings. The AO, therefore, passed order u/s. 144 r.w.s. 147 of the Act on 27.3.2022 determining total income at Rs. 7,27,79,870/-.
Aggrieved by the order of the AO the assessee filed the appeal before the Ld.CIT(A), who vide his order dated 25.3.2025 has partly allowed for statistical purpose the appeal against which the assessee is in appeal before the Tribunal.
The Ld. AR has submitted that in the assessment order dated 27.3.2022 passed u/s. 144 r.w.s. 147, the AO simply mentioned that section 148 notice, dated 30.3.2021 was issued and nothing has been mentioned regarding the service of the notice upon the assessee. Section 148(1) clearly reflects that in order to fulfil the jurisdictional requirement for income escaped assessment proceedings u/s.
It was further submitted that in the present case preliminary jurisdictional notice u/s. 148 and other notices are just reflected in the E-proceedings Portal and neither served upon the assessee physically by post nor transmitted electronically by email. As none of the notices are served upon the assessee, no reply was filed before the AO during the assessment proceedings, hence, assessment was completed u/s. 147 r.w.s. 144 of the Act. 3 | P a g e It was further submitted that issue regarding service of the section 148 notice and other notices was raised before the CIT(A) and this ground was not adjudicated by the CIT(A) under the concept that relief was granted on merits and no need to adjudicate the grounds of appeal
regarding service of notices. It was further submitted that the notice prescribed in section 148 of the Act for the purpose of initiating reassessment proceedings is not a mere procedural requirement but is a condition precedent to the validity of any reassessment made. Mere issuance of notice for income escaping assessment is not sufficient but its service on the assessee, that too, within the time frame envisaged under section 149 of the Act is necessary for a valid reopening of assessment. Reliance is placed on the following decisions wherein, it was held that mere issuance of notice u/s. 148 is not enough for reassessment proceedings but is service upon the assessee is important for a valid reassessment proceedings. (i) Hon’ble Supreme Court in the case of V. Narayan Chetty vs. ITO (1959)
35. ITR 388 (SC). (ii) Hon’ble Supreme Court in the case of R.K. Upadhyaya vs. Ahanabhai P. Patel (1987) 166 ITR 173 (SC) (iii) Hon’ble Punjab and Haryana High Court in the case of CIT vs. Avtar Singh (2012) 304 ITR 333 (P&H). (iv) Hon’ble Punjab and Haryana High Court in the case of CIT v Laxmi Narain (2008) 168 Taxman 128 (P&H). (v) Hon’ble High Court of Delhi in the case of CIT v Rajesh Kumar Sharma (2009) 311 ITR 235 (DHC). (vi) Hon’ble Punjab and Haryana High Court in the case of CIT v Cebon India Ltd. (2012) 347 ITR 583 (P&H). (vii) Hon’ble High Court of Karnataka in the case of CIT v ITC Hotels (2014) 50 taxmann.com 424 (Karn HC). (viii) Hon’ble High Court of Delhi in the case of CIT v CPR Capital Services Ltd. (2011) 11 taxmann.com 150 (DHC). 4 | P a g e In view of above, it is submitted that in the present case notice u/s. 148 dated 30.3.2021, the preliminary section 148 notice including all notices are not served upon the assessee, thus it is prayed to quash the reassessment order. Further, it is submitted that in the present case notice u/s. 148 dated 30.3.2021 and other notices issued during the assessment proceedings are reflected in the E-Portal not transmitted to the assessee electronically by email. In this regard, he placed reliance upon the decision of the Hon’ble Punjab and Haryana High Court in the case of Munjal BCU Centre of Innovation and Entrepreneurship vs. CIT (E) decided in CWP No. 21028 of 2023 dated 4.3.2024 reported in [2024] 160 taxmann.com 629 (P&H) and the decision of the Chanidgarh ITAT Bench in the case of Chhering Tomdan vs. ITO, in dated 4.9.2024 wherein the above decision of Munjal BCU Centre of Innovation and Entrepreneurship vs. CIT (supra) was followed. He further relied upon the decision of the Hon’ble Delhi High Court in the case of Suman Jeet Aggarwal & Ors. Vs. ITO passed in WP (C) No. 10/2022 and other connected matter dated 27.10.2022 reported in [2022] 143 taxmann.com and other connected matter dated 27.10.2022 reported in (2022) 143 taxmann.com 11 (DHC). He further relied upon the decision of the ITAT, Raipur in the case of Mamta Agrawal vs PCIT dated 21.6.2024. In view of above, it is submitted that section 148 notice dated 30.3.2021 and other notices are reflected in the E-proceedings portal, not served upon the assessee, thus, it is requested to quash the assessment order.
7. On the other hand, Ld. DR submitted that section 148(1) of the Act mandates only the issuance of notice for assuming jurisdiction to reopen an assessment. The statute consciously uses the expression “The Assessing Officer shall issue a notice” and does not employ the term “serve”. Therefore, the assessee’s argument that service of notice is a jurisdictional precondition is based on a misreading of the statutory provision. The contention of the assessee that the reassessment proceedings u/s. 147 are invalid on the ground that the 5 | P a g e assessment order does not specifically record the service of notice u/s. 148 is misconceived, legally untenable, and devoid of merit. It is further submitted that notice u/s. 148 dated 30.3.2021 was duly issued through the prescribed mode, i.e., the ITBA, which constitutes valid service in terms of section 282 of the Act. Mere absence of a detailed narration of service in the assessment order does not invalidate the proceedings. There is no statutory requirement under the Act that the assessment order must expressly record, mode, date, or manner of service of notice u/s 148. It is submitted that what is necessary is the fact of issuance and service not its verbatim reproduction in the assessment order. He submitted that the contention of the Ld. AR that reassessment proceedings are invalid due to alleged non-service of notice u/s. 148 and he also submitted that the case laws cited by the Ld. AR are distinguishable on facts and law and therefore, do not apply to the present case. It was submitted that notice u/s. 148 dated 30.3.2021 and other statutory notices issued during the assessment proceedings were duly issued through the Income Tax Department’s e- Proceedings /ITBA portal, which is a statutorily recognized mode of electronic communication under section 282 of the Act.
We have heard the rival contentions and perused the records. We find that Section 148(1) clearly reflects that in order to fulfil the jurisdictional requirement for income escaped assessment proceedings u/s. 147.In the present case preliminary jurisdictional notice u/s. 148 and other notices are just reflected in the E-proceedings Portal and neither served upon the assessee physically by post nor transmitted electronically by email. As none of the notices are served upon the assessee, no reply was filed before the AO during the assessment proceedings, hence, assessment was completed u/s. 147 r.w.s. 144 of the Act. The notice prescribed in section 148 of the Act for the purpose of initiating reassessment proceedings is not a mere procedural requirement but is a condition precedent to the validity of any reassessment made. Mere issuance of notice for income escaping assessment is not sufficient but its 6 | P a g e service on the assessee, that too, within the time frame envisaged under section 149 of the Act is necessary for a valid reopening of assessment. It is settled law that mere issuance of notice u/s. 148 is not enough for reassessment proceedings but is service upon the assessee is important for a valid reassessment proceedings. It is noted that in the present case notice u/s. 148 dated 30.3.2021 and other notices issued during the assessment proceedings are reflected in the E-Portal not transmitted to the assessee electronically by email. We find that on identical issue, the Hon’ble Delhi High Court in the case of Suman Jeet Aggarwal & Ors. Vs. ITO passed in WP (C) No. 10/2022 and other connected matter dated 27.10.2022 reported in [2022] 143 taxmann.com and other connected matter dated 27.10.2022 reported in (2022) 143 taxmann.com 11 (DHC) has discussed the entire procedure regarding communication of notices by the department to the assessee under provisions of section 282 of the Act from the said order, relevant Questions, observations and findings of the Hon’ble Delhi High Court applicable in the present case of the assessee is culled out as under:- “28. Question (V): whether upload of the Section 148 notice on the “My account” of the assessee on e filing portal is valid transmission under the Act of 1961? The Court has answered this in the negative, against the Department. 28.1 With respect to the notices falling under the Category ‘D’ dated 31st March, 2021 and digitally signed on 31st March, 2021 it has been stated that, they were not served on the assesses either by – email or post or by courier services as they were just uploaded on the e-filing portals of the assesses. It is the petitioners that no real time alert was received by the assessee and the Department has not disputed this fact. ……..
7 | P a g e 28.8 However, since the assessee in the present case did become aware of the notices later and the assessment proceedings in their cases are still pending, we are not inclined to quash these notices. 28.9 It has come on record that the ITBA records the time and date when e filing portal is accessed by the assessee, so that first date on which the notices were assessed by the assessee is duly available. This date will be considered by the JAO as the date of issuance of notices by the JAOs. Illustratively, in WP(C) 13888 of 2021 the notice dated 31.3.2021 was never served on the assessee, instead the assessee claims that he became aware of the same on 23rd November, 2021 while checking his e filing portal, the JAO is directed to verify the date on which the notice was first viewed by the assessee, and consider the same as the date of issuance…”
The ITAT, Raipur Bench in the case of Mamta Agrawal vs. PCIT in dated 21.6.2024 and in the case of Maa Sharda Corporation vs. ITO in dated 21.7.2025, quashed the order relying upon the aforesaid decision of the Hon’ble Delhi High Court in the case of Suman Jeet Aggarwal & Ors. Vs. ITO (Supra).
In view of the aforesaid observations, respectfully following the guiding principles enumerated therein, we accept the conditions of the assessee considering the facts of the present case that notice under section 148 dated 30.3.2021 and other notices are reflected in the E-proceedings portal, not served upon the assessee, therefore, the reassessment order u/s. 147 r.w.s. 144 passed following the said notice u/s. 148 of the Act which is not validly served is liable to be quashed. We hold and direct accordingly. As a result, additional grounds raised by the assessee stand allowed.
Since, we allowed the legal additional grounds raised
by the assessee and quash the reassessment accordingly, the other issues need not to be adjudicated upon.