Wrong Attachment In Reassessment Email Does Not Invalidate Income Tax Notice: Delhi High Court

The Delhi High Court has held that an inadvertent attachment of another assessee's notice along with a reassessment email doesn't invalidate proceedings under Section 148 of the Income Tax Act, 1961, so long as the substance of the communication clearly indicates that the statutory notice was intended for the concerned assessee.

A division bench of Justices Dinesh Mehta and Vinod Kumar thus dismissed the writ petition filed by an assessee challenging the continuation of reassessment proceedings for Assessment Year 2012–13 on the ground that the email sent by the Assessing Officer had erroneously attached a notice pertaining to a third party.

The petitioner contended that although a notice under Section 148 was uploaded on the e-filing portal on 31 March 2019, the email sent by the Assessing Officer on the same date carried an attachment bearing the name and PAN of another assessee. It was argued that such an error amounted to invalid issuance and service of notice, rendering the reassessment proceedings without jurisdiction.

The Revenue, on the other hand, submitted that the email itself expressly stated that the notice under Section 148 pertained to the petitioner, clearly mentioning his name, PAN and the relevant assessment year, and that the incorrect attachment was a mere inadvertent error.

The High Court observed that on a plain reading of the email, it was evident that the statutory notice was intended for and addressed to the petitioner.

“The e-mail, on its plain reading, clearly indicates that the statutory notice was intended for, and addressed to, the petitioner, bearing his correct name, PAN and Assessment Year. The fact that, along with the said e-mail, a notice pertaining to another assessee inadvertently came to be attached, does not efface the substance of the communication and the same, in the considered view of this Court, cannot be kept at an equal footing to a jurisdictional defect,” it said.

The Court also rejected the petitioner's contention on limitation, holding that under the pre-amendment regime, what is material is the issuance of the notice under Section 148 within the prescribed period and not its service within that period. 

“once it is found that the notice under Section 148 was issued on 31.03.2019, i.e., within the prescribed period of limitation, it was sent to and received by the petitioner on 31.03.2019 itself. Hence, even if it is taken that service was effected thereafter cannot, by itself, render the proceedings a nullify.”

Reliance was placed on R.K. Upadhyaya v. Shanabhai P. Patel (1987) where the Supreme Court made it clear that for the purposes of Section 149 (time limits for issuing notices (under Section 148) for reassessment of income) of the Act, what is material is the issuance of the notice and not its service within the period of limitation.

As such, the Court upheld the order rejecting the assessee's objections to jurisdiction and dismissed the plea.

For Petitioner: Advocates Manuj Sabharwal, Drona Negi and Devvrat Triwari.

For Respondent: Senior Standing Counsel Sunil Agarwal with Junior Standing Counsel Priya Sarkar