The Hon’ble Delhi High Court has been pleased to stay the Notices issued under Section 148 of the Income Tax Act, which have been dated 31.03.2021 or before, however, digitally signed/received/issued/delivered only on 01.04.2021 or later. The said interim stay has been granted in the case of Sharad Garg v. ITO W.P(C) No. 8994/2021 and other connected matters.

Earlier, the Hon’ble Delhi High Court in the case of Mon Mohan Kohli v. ACIT 2021(12) TMI 664, vide judgment dated 15.12.2021 has set aside the Notice issued Under Section 148 of the Income Tax Act on or after 01.04.2021, without following the procedure prescribed under Section 148A of the Income Tax Act. It is pertinent to mention here that Section 148A have been newly inserted in the Income Tax Act by Finance Act’2021 w.e.f. 01.04.2021.

Hearing the batch matters in Sharad Garg (Supra), the Hon’ble High Court divided the matters in the following categories:

1. Category A: is in respect of writ petitions where Notice is dated 31.03.2021 or before but digitally signed on or after 01.04.2021, however sent or received on or after 01.04.2021.
2. Category B: is in respect of writ petitions where Notice is dated 31.03.2021 or before, digitally not signed, however sent and received on or after 01.04.2021.
3. Category C: is in respect of writ petitions where Notice is dated 31.03.2021 or before, digitally singed on or before 31.03.2021, however sent and received on or after 01.04.2021.
4. Category D: is in respect of writ petitions where Notice is dated 31.03.2021 or before, digitally signed on or before 31.03.2021, no service either by email or by post or any other mode and the assessee came to know later on through Portal or receipt of subsequent notice under Section 142(1).
5. Category E: is in respect of writ petitions where Notice is dated 31.03.2021 or before, manually singed, no service by e-email but dispatched through speed post on or after 01.04.2021.

The Hon’ble Delhi High Court stayed the Notices mentioned in the above said categories while relying on the judgement of Hon’ble Allahabad High Court in the case of Daujee Abhushan Bhandar Pvt. Ltd. vs. UOI, Writ Tax No.78/2022, wherein it has been held that:

“29. ………..Section 13(1) of the Act, 2000 provides that unless otherwise agreed, the dispatch of an electronic record occurs when it enters into computer resources outside the control of the originator. Thus, the point of time when a digitally signed notice in the form of electronic record is entered in computer resources outside the control of the originator i.e. the assessing authority that shall the date and time of issuance of notice under section 148 read with Section 149 of the Act, 1961. 30. 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 though 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. ………..”

Read the interim order of Hon’ble Delhi High Court at: Interim Stay_Delhi HC

Read the judgement of Hon’ble Allahabad High Court at:Allahabad HC judgement

Yuvraj Singh

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Yuvraj is an advocate and has completed his B.A. LL.B(Hons) from RGNUL-Punjab. He is a practicing advocate and has been involved in matters pertaining to GST and other indirect taxes as well as Direct Tax. He is active in Writ Courts and has involvement in a few landmark judgments like Pitambra Books Pvt. Ltd. V. Union of India (W.P.C. No. 627 of 2020), and represented Sales Tax Bar Association (Delhi) to resolve GST issues and glitches.