Facts of the Case

The petitioner challenged the validity of a reassessment notice issued under Section 148 of the Income Tax Act dated 30.06.2021 for Assessment Year 2013–14. The notice was received by the petitioner via email on 16.07.2021.

Subsequently, an order under Section 148A(d) dated 29.06.2022 was also passed against the petitioner. The petitioner contended that the notice was issued beyond the permissible limitation period under the law, particularly in light of the new regime introduced by the Finance Act, 2021.

 Issues Involved

  1. Whether a reassessment notice under Section 148 dated 30.06.2021 but served on 16.07.2021 is barred by limitation.
  2. Whether such notice complies with the new reassessment regime introduced by the Finance Act, 2021.
  3. Whether the delay in service can be justified on technical grounds such as system glitches.

 Petitioner’s Arguments

  • The limitation period for issuing notices under the erstwhile Section 148 expired on 30.06.2021.
  • Although the notice bears the date 30.06.2021, it was actually served only on 16.07.2021, making it time-barred.
  • The petitioner relied on judicial precedents including:
    • Suman Jeet Agarwal v. Income Tax Officer
    • M/s Vinayak Services Pvt. Ltd. v. Income Tax Officer Ward 26(3) Delhi & Ors.
  • It was further argued that the Supreme Court’s ruling in Union of India v. Ashish Agarwal would not apply, as it only saves notices issued between 01.04.2021 to 30.06.2021 under the old regime.

 Respondent’s Arguments

  • The Revenue contended that the notice was generated on 30.06.2021, evidenced by the Document Identification Number (DIN).
  • It was argued that the delay in delivery (16.07.2021) was due to a technical glitch.
  • However, the Revenue fairly conceded that the issue regarding validity of such notices is already covered by earlier judgments including Suman Jeet Agarwal and Vinayak Services Pvt. Ltd. cases.

 Court’s Findings / Order

  • The Court observed that the only evidence of service on record showed that the notice was emailed on 16.07.2021 at 12:12 AM.
  • No material was produced by the Revenue to establish service before 30.06.2021.
  • The Court held that:
    • The notice was barred by limitation.
    • The issuance was contrary to established precedents.
  • Accordingly, the impugned notice under Section 148 was set aside.
  • The writ petition was disposed of in favour of the petitioner.

 Important Clarification

  • Mere generation of a notice (with DIN) is not sufficient; valid service within limitation is mandatory.
  • Service date holds critical importance in determining limitation under reassessment proceedings.
  • Technical glitches cannot override statutory limitation requirements.
  • The judgment reinforces strict compliance with procedural timelines under the reassessment regime.

Sections Involved

  • Section 148 – Income escaping assessment
  • Section 148A(d) – Procedure prior to issuance of notice
  • Finance Act, 2021 – New reassessment framework

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS14022023CW122782022_224103.pdf

 Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.