ACIT CIRCLE-28(1), NEW DELHI, NEW DELHI vs. KULDEEP KAUR, NEW DELHI

The Revenue has filed appeal against the order of ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi CO No.95/Del/2025 [“ld. CIT(A)”, for short] dated 28.10.2024 for AY 2016-17. The assessee has also filed cross objections in the aforesaid assessment year.

Since the issues are common and the appeals and cross objections are connected, hence the same are heard together and being disposed off by this common order.

First we proceed to decide the cross objections raised by the assessee for the Assessment Year 2016-17.

At the time of hearing, ld. AR of the assessee submitted that the assessee is challenging the legal issue by taking the following grounds in the cross objections :-

Ld. AR submitted that the notice under section 148 of the Income-tax Act, 1961 (for short ‘the Act’) had been signed digitally by the Assessing Officer on 31.03.2021 at 07.03 P.M. but not ever served to the assessee, neither on the ITD Portal nor on assessee’s e-mail or physically and the assessee had viewed it on ITD Portal only on 05.07. 2021. He further submitted that because of the non-receipt / service of notice claimed to be issued u/s 148 dated 31.03.2021 by the midnight of 31.03.2021 and the same was served on ITD Portal only after 01.04.2021 with the permission of Ld. JCIT u/s 151 of the Ac, the notice was invalid as become non-est under the law. In this regard, he heavily relied on the decision of Hon’ble Supreme Court of India in the case of Union of India &Ors. vs. Rajeev Bansal : 2024 SCC online SC 2693 and Hon’ble Delhi High Court in the case of Suman Jeet Aggarwal Vs. ITO, (2022) 143 Taxmann.com II (Delhi) and also on various case laws. Ld. AR of the assessee submitted that an affidavit dated 24.04.2025 in respect of the above submissions from the assessee has already been filed. Accordingly, he pleaded that the notice u/s 148 is non-est and barred by time, hence the reassessment

Considered the rival submissions and material available on record. We observe that notice under section 148 of the Act was signed digitally by the Assessing Officer on 31.03.2021 but the same was not served to the assessee, neither on the ITD Portal nor on assessee’s e-mail or physically. Further we observe that the assessee had viewed it on ITD Portal only on 05.07.2021. We further observe that because of the non-receipt / service of notice claimed to be issued u/s 148 dated 31.03.2021 by the midnight of 31.03.2021 and the same was served on ITD Portal only after 01.04.2021 with the permission of Ld. JCIT u/s 151 of the Ac, the notice is invalid as become non-est and bad in law. Further we observe from the letter dated 03.11.2025 of ACIT, Circle 28 (1), Delhi which confirms the aforesaid fact that the notice u/s 148 is not served on 31.03.2021. For the sake of brevity, the relevant part of the letter dated 03.11.2025 is reproduced below :- “Query 2 : That the reassessment order passed on 30.03.2022 u/s 147 read with section 144B of the Income Tax Act, 1961 further becomes non-est under the law and to the facts of the case because no notice u/s 148 of the Income Tax Act, 1961 was issued by the Assessing Officer up till 12.00 pm, midnight on 31.03.2021 as the same was viewed on ITBA Portal on 05.07.2021 by the assessee. For which no communization, if any, was also sent one mail for CO No.95/Del/2025 which the approval was required to be obtained from Pr.CCIT u/s 151(ii) of the Act. Reply : The contention of the assessee is not correct as notice u/s 148 was issued through ITBA on 31.03.2021 vide DIN & Notice No.ITBA/AST/S/148/2020-21/1032094777(1) and for issuance of notice requires approval u/s 151(ii) of the Act, was taken from the competent authority i.e. Addl.CIT. The notice u/s 148 was duly issued in the registered e-mail on 31.03.2021 of the assessee but not served, due to technical error.”

In view of the above facts, it is clear that the because of the non-receipt / service of notice u/s 148, the notice is invalid as become non-est and bad in law 9. In this regard, we find force from the judgments of Hon’ble Supreme Court of India in the case of Union of India &Ors. vs. Rajeev Bansal : 2024 SCC online SC 2693. Further we observe that this issue is also covered in favour of the assessee by the decision Hon’ble Delhi High Court in the case of Suman Jeet Aggarwal Vs. ITO, (2022) 143 Taxmann.com II (Delhi) wherein Hon’ble High Court has held as under :- "Section 149, read with section 148, of the Income-tax Act, 1961 and section 13 of the Information Technology Act, 2000 - Income escaping assessment - Time limit for issuance of notice (Validity of notice) - Assessment years 2013-14 to 2017-18 - Sections 147, 148, 149 and 151 were amended vide Finance Act of 2021, with effect from 1-4-2021 Since there was a regime change with respect to law of limitation coming into effect from 1-4-2021, which curtailed time limit for reopening of assessment from 6 years to 3 CO No.95/Del/2025 years, revenue, with a view to avail limitation prescribed under unamended section 149, generated reassessment notices under section 148 dated 31-3- 2021, but same were despatched on or after 1-4-2021 -Assessee challenged validity of notices issued under section 148 Whether function of generation of notice on ITBA portal and digital signing of notice is executed by Assessing Officer while function of drafting of e-mail to which notice is attached and triggering e-mail to assessee is performed by ITBA e- mail software system Held, yes -Whether thus, mere generation of notice under section 148 on ITBA software cannot in fact or in law constitute issue of notice, it is only upon due despatch that notice can be said to have been 'issued' -Held, yes - Whether despatch as per section 13 of Act of 2000 is sine qua non for issuance of Notice through electronic mail for purpose of section 149 - Held, yes - Whether in case of paper form, notice must be despatched by post on or before 31-3-2021 and for communication in electronic form e-mail should 'have been despatched on or before 31-3-2021 Held, yes - Whether since in instant case, dispatch of notice by post and e-mail was carried out on or after 1-4-2021, it was to be held that, impugned notices dated 31-3-2021 would not meet test of issued under section 149 and would be time barred Held, yes [Paras 25.12, 25.13, 25.23 and 26]”

Further, we observe that it is trite law, that grant of the sanction by the authority under Section 151 of the Act, is not a mechanical act on his part but it requires due application of mind to the reasons recorded before granting the sanction and this has been provided so as to safeguard CO No.95/Del/2025 against issue of reopening notice (which seek to disturb the settled position) to ensure that assessee is not troubled with reopening issues without satisfactory reasons. Therefore, it must pass muster of the Superior Officer in the context of Sections 147 and 148 of the Act, before it is issued to the party.

Respectfully following the aforesaid decisions, we hold that the notice issued u/s 148 is non-est and bad in law, hence the reassessment proceedings are quashed and the grounds raised