In a significant case, the Delhi High Court quashed the reassessment proceedings as the delay in issuance notice under section 148A(b) of the Income Tax Act, 1961 due to technical glitches on the Income Tax Business Application (ITBA).
Himanshu Infratech Pvt Ltd, the petitioner challenged the unsigned notice issued under section 148, as it existed prior to substitution vide Finance Act, 2021 w.e.f. 01.04.2021, and now deemed to be noticed under section 148A(b) of the Income Tax Act, 1961 (‘the Act’).
The letter/ notice issued by Respondent No.1 in compliance with the judgment of the Apex Court in the case of Ashish Agarwal (supra) and in terms of Instruction No.1 issued by Respondent No.3 communicating the so-called information/ material forming the basis of proceedings under section 148/148A of the Act.
It was submitted that the notice issued under Section 148 of the Act is time-barred, as it has been issued beyond the window available to the respondents/assessee i.e., between 01.04.2021 and 30.06.2021 as per the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [“TOLA”].
It was argued on behalf of the petitioner that the time available for issuance of notice under Section 148 of the Act that was available to the respondent/ revenue, as per law, spanned between 01.04.2021 to 30.06.2021.
It was explained by the respondent that the delay in issuance of the notice occurred on account of technical glitches due to which the notice could not be uploaded on ITBA.
It would be significant to observe that although the notice dated 30.06.2021 under Section 148 of the Act bears an endorsement at the foot of the page that it has been digitally signed, it is inchoate, in the sense that it is not accompanied by a date.
It was evident that the notice was never physically delivered to the petitioner/assessee. As such, the fact remains that service of the said notice under Section 148 of the Act was affected on the petitioner only on 16.07.2021 through email, though the limitation period had already expired on 30.06.2021.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia quashed the impugned notice under Section 148A(b) and the impugned order under Section 148A(d) of the Income Tax Act, 1961.
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