K MOHAN RAJ,SALEM vs. ITO 1/ WARD 1-1, KRISHNAGIRI

We have gone through the various decisions relied upon by the assessee and in all the cases invariably within the time stipulated in the notice issued under section 148 of the Act, either the assessee or the authorized representative either filed the return of income or submitted that the original return of income may be treated as the return of income filed pursuant to the notice under section 148 of the Act. Here in this case no return of income was filed within the time, and no return of income was filed till the commencement of hearing. It was only when the proceedings are going on, that too without obtaining the permission of the learned Assessing Officer the return was filed online and on the next day the learned Assessing Officer was informed of such online filing.

For these reasons, we brush aside the contention of the assessee that for want of issuance of notice under section 143(2) of the Act, the assessment is bad under law. Next contention of the assessee is that assessment is bad for want of sanction of the learned PCIT before issuance of notice under section 148 of the Act.

Section 282(1) of the Act of 1961 provides that service of notice or summon or requisition may be made by delivering or transmitting a copy thereof to the person therein named. However, the amended provision of Section 282A of the Act of 1961 was brought which provides that notice or document shall be signed and issued in paper form or communicated in electronic form in accordance with such procedure as may be prescribed. Sub-section (2) of Section 282A of the Act of 1961 is quite relevant. It provides that every notice or document to be issued, served or given for the purposes of this Act by any income tax authority shall be deemed to be authenticated if the name and office of a designated income tax authority is printed, stamped or otherwise written thereon.

Rule 127A of the Rules of 1962, extracted above, provides that every notice or other document communicated in electronic form by an income tax authority under the Act shall be deemed to be authenticated in case of electronic mail or electronic mail message, if the name and office of such income-tax authority is printed on the email body and if the notice or other document is in the email body itself. Rule 127A of the Rules of 1962 is elaborate and would further be discussed subsequently.

In the facts of the present case, it is not in dispute that notice under Section 148 of the Act of 1961 is an electronically generated notice issued on 31.3.2021. The petitioner has raised issue about the receipt of notice on the day subsequent to 31.3.2021 without explaining that the requirement of provisions is for issuance of notice and not of the receipt. The issue thus cannot be taken up from the fact about the receipt of the notice, but in reference to the issuance of the notice. It is more so when Rule 127A(1) of the Rules of 1962 provides that every notice communicated in electronic form by an income tax authority is deemed to be authenticated.

A perusal of the notice dated 31.3.2021 shows it to have been sent through email and as per Rule 127A(1) of the Rules of 1962, it is deemed to be authenticated if the name and office of the income tax authority is printed on the email body or is printed on the attachment to the email. The notice in the instant case shows the name and office of the income tax authority printed on the attachment to the email. The petitioner could not bring any fact on record to show that notice under Section 148 of the Act of 1961 was not issued by the electronic mode, i.e., by email, on 31.3.2021 and, that too, when the fact regarding digital signature of the authority could not be disputed. In fact, the digital signature of the authority is also on 31.3.2021 and, therefore, we do not find that it is a case where notice under Section 148 of the Act of 2021 was issued on or after 1.4.2021, rather it was issued prior to the date aforesaid.

At this stage, we will consider the judgment of the Allahabad High Court in Daujee Abhushan Bhandar Pvt Ltd, supra, which is also in reference to the same provisions. While discussing the issue, the Division Bench of the Allahabad High Court has referred to Rule 127A of the Rules of 1962 which deals with communication in the electronic form and after referring to Section 13 of the Information Technology Act, 2000, it was held that despatch of an electronic record occurs when it enters a computer resource outside the control of the originator. Therefore, if a notice is digitally signed by the income tax authority

After recording the aforesaid finding, the Division Bench of the Allahabad High Court further examined the definition of the words "issue" and "issuance of notice" which have not been defined under the Act of 1961. The dictionary meaning of both the words were thereafter taken and after considering different judgments, the Division Bench finally came to the conclusion that mere digitally signing the notice is not issuance of notice. The impugned notice under Section 148 of the Act of 1961 in that case was received on 6.4.2021 and, therefore, it was treated to be time barred.

What we find relevant from the judgment in Daujee Abhushan Bhandar Pvt Ltd, supra, is consideration of facts given in paragraph 3 with a conclusion in the last paragraph and for ready reference, both these paragraphs are quoted herein:

In view of the discussion made above, we hold that mere digitally signing the notice is not the issuance of notice. Since the impugned notice under Section 148 of the Act, 1961 was issued to the petitioner on 06.04.2021 through e-mail, therefore, we hold that the impugned notice under section 148 of the Act, 1961 is time barred. Consequently, the impugned notice is quashed."

In paragraph 3, it has been noted that the notice under Section 148 of the Act of 1961 was digitally signed by the authority on 31.3.2021 and was sent to the assessee through email, but email was received by the assessee on 6.4.2021 and thereby taking the date of receipt to be relevant, the judgment was rendered favourable to the assessee. With due respect to the Division bench of the Allahabad High Court, the issue threadbare discussed by it refers to the date of issuance and not of receipt, but after making discussion in reference to all the provisions, conclusions have been drawn referring to the date of receipt, without discussion as to when it enters a computer resource outside the control of the originator and for that purpose, we would like to refer to paragraphs 16 to 20 of the judgment in Daujee Abhushan Bhandar Pvt Ltd, supra, with which we record our agreement:

Rule 127 A(1) of the Rules 1962 provides that every notice or other document communicated in electronic form by an authority under the Act shall be deemed to be authenticated in case of electronic mail or electronic mail message (e-mail) if the name and office of such income tax authority is printed on the e- mail body, if the notice or other document is in the e mail body itself, or is printed on the attachment to the e-mail, if the notice or other document is in the attachment and the e- mail, is issued from the designated e-mail address of such income tax authority. Thus, the issuance of notice and other document would take place when the email is issued from the designated e-mail address of the concerned income tax authority.

Since Section 149 of the Act 1961 requires notice to be issued by Income Tax Authority, therefore, in terms of sub Section (1) of Section 282 A it has to be signed by that authority and to be issued in paper form or communicated in electronic form by that authority in accordance with procedure prescribed.

The communication in electronic form has been prescribed in Rule 127 A of the Rules 1962 which provides a procedure for issuance of every notice or other document and the e-mail in electronic form/electronic mail which has to be issued from the designated e-mail address of such income tax authority.

Thus, after digitally signing the notice the income tax authority has to issue it to the assessee either in paper form or through electronic mail. Sub-Section (1) of Section 13 of the Act 2000 provides that dispatch of an electronic record occurs when it enters a computer resource outside the control of the originator. The aforesaid sub Section (1) of Section 13 indicates the point of time of issuance of notice. Therefore, after a notice is digitally signed and when it is entered by the income tax authority in computer resource outside his control i.e. the control of the originator then that point of time would be the time of issuance of notice."

The paragraphs referred to above show the manner of issuance of notice by electronic mode and when it would be taken to have been issued, but then the judgment was rendered in reference to the date of receipt of the notice, without showing that after the notice was digitally signed on 31.3.2021, it was not sent being entered by the income tax authority in computer resource outside his control. Thus, with due respect to the Division Bench of the Allahabad High Court, the conclusions finally drawn on the facts of that case cannot be applied, rather we cannot change the language of the provision by changing the word "issuance" to that of "receipt".

Finding that the notice in question was issued on 31.3.2021, we do not find a case in favour of the petitioners and, accordingly, W.P.Nos.27998 and 28000 of 2021 and W.P.(MD) No.11312 of 2021 are dismissed. However, it is with liberty to the petitioners to challenge the assessment orders, if they so choose, by availing the remedy as provided under law. The dismissal of these writ petitions would not come in the way of the petitioners availing the remedy in accordance with law.

In view of the finding rendered herein above that notices were issued before 1.4.2021, W.P.Nos.27997 and 27999 of 2021 and W.P.(MD) No.16821 of 2021 challenging the validity of Explanation to Clause A(a) modified by notifications