In a group of matters challenging the issue of notices under section 148 of the Act as it stood prior to its amendment on April 1, 2021, by the Finance Act, 2021 was challenged. Since there was a regime change with respect to law of limitation coming into effect from April 1, 2021, which curtailed the time limit for reopening of assessment from six years to three years, the Department with a view to avail of the limitation prescribed under the unamended section 149 of the Act of 1961, generated reassessment notices under section 148 of the Act of 1961 for the assessment years 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18, all dated March 31, 2021. The notices were generated and sent for despatch through electronic mail by the jurisdictional Assessing Officer using the income tax business application software. The facts on record evidence that though the notices were generated by the jurisdictional Assessing Officer using the income tax business application software on March 31, 2021, the same were despatched through the income tax business application’s e-mail system, using the income tax business application servers on or after April 1, 2021 ; and/or despatched by the jurisdictional Assessing Officer through normal post on or after April 1, 2021. In view of the admitted fact as regards the date of despatch being April 1, 2021, or thereafter, the Department has sought to contend that for the purpose of determining the date on which the notices were issued within the meaning of section 149 of the Act of 1961, the date of despatch by the income tax business application software system through e-mail or speed post was not relevant and it is only the date of generation of the notices on the income tax business application portal, which must be considered :

Considering the ratio in UOI v. Ashish Agarwal (2022) 444 ITR 1 (SC)  the Court  classified  writs into the following categories : category A comprising writ petitions where the notice was dated March 31, 2021 or before but was digitally signed on or after April 1, 2021, and was sent and received on or after April 1, 2021; category B where notice was dated March 31, 2021 or before, was digitally not signed, but was sent and received on or after April 1, 2021; category C where notice was dated March 31, 2021 or before, was digitally signed on or before March 31, 2021, but was sent and received on or after April 1, 2021 ; category D where notice was dated March 31, 2021 or before, was digitally signed on or before March 31, 2021, but there was no service either by e-mail or by post or any other mode and the assessee came to know later on through the portal or receipt of subsequent notice under section 142(1) ; category E where notice was dated March 31, 2021 or before, was manually signed, there was no service by e-mail but was despatched through speed post on or after April 1, 2021.

Accordingly, the Court held, (i) that the notices falling under category A, which were digitally signed on or after April 1, 2021, were to bear the date on which the notices were digitally signed and not March 31, 2021. The notices were to be considered as show-cause notices under section 148A(b) of the Act

(ii) That the notices falling under category B which were sent through the registered e-mail ID of the respective jurisdictional Assessing Officers, though not digitally signed were valid.

(iii) That in the case of notices falling under category C which were digitally signed on March 31, 2021, the jurisdictional Assessing Officer was to verify and determine the date and time of despatch as recorded in the Income Tax Business Application portal in accordance with the law laid down in the judgment as the date of issuance.

(iv) That in the case of notices falling under category D which were only uploaded in the e-filing portal of the assessees without any real time alert, the jurisdictional Assessing Officer was to determine the date and time when the assessee viewed the notices in the e-filing portal, as recorded in the Income Tax Business Application portal and conclude such date as the date of issuance in accordance with the law laid down in the judgment. If such date of issuance was determined to be on or after April 1, 2021, the notices were to be construed as issued under section 148A(b) of the Act.

(v) That in the case of notices falling under category E which were manually despatched, the jurisdictional Assessing Officer was to determine in accordance with the law laid down in the judgment, the date and time when the notice was delivered to the post office for despatch and consider that date as the date of issuance. If the date and time of despatch recorded was on or after April 1, 2021, the notice was to be construed as show-cause notice under section 148A(b) in terms of the directions of the Supreme Court

(vi) That in the case of notices sent to unrelated e-mail addresses the jurisdictional Assessing Officer was to verify the date on which the notice was first viewed by the assessee on the e-filing portal and consider that date as the date of issuance. If such date of issuance was determined to be on or after April 1, 2021, the notices was to be construed as issued under section 148A(b) of the Act in terms of the judgment.(AY.2018-19)