COGNIZANCE CONSTRUCTIONS PRIVATE LIMITED,HYDERABAD V. ITO., WARD-1(1), HYDERABAD

ITA 344/HYD/2025

AI Insights

The case revolves around the dispute concerning the service of a notice under section 148 of the Income Tax Act, 1961, issued by the Assessing Officer. The assessee contested the validity of the notice, claiming it was not properly served, which was crucial for the reassessment proceedings. The CIT(A) had remanded the matter back to the Assessing Officer for fresh adjudication, which included verifying the actual dispatch date of the notice. The tribunal, referencing the judgment of the Hon'ble Delhi High Court in Suman Jeet Agarwal, directed a detailed examination of the dispatch records to ascertain the correct date of issuance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779936 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-02-2025
• Other Referred Cases: Suman Jeet Agarwal vs. Unknown, Ashish Agarwal vs. Unknown, Chetan Gupta vs. Unknown
• Laws Referred To: Income-tax Act of 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Reassessment proceedings; Principle of natural justice
• Section: 148

Judgement Text

"13 ITA.No.344/Hyd./2025 facts could be explained only by the concerned post office. Further, it is also requires to be verified the corroborating fact about the status of the said speed post booked by the Assessing Officer for sending the notice u/sec.148 of the Act and the relevant information about the status of the said speed post can be provided by the post office. There is no quarrel if notice is despatched by the Assessing Officer and finally the post office has delivered the same, then, the notice will be treated as issued on the date of despatch when it was out of control of the Assessing Officer. The preparation of the notice, signing of the notice and generating the DIN no. on 30.03.2021 is not in dispute, but, the assessee has disputed only the service of the said notice sent through speed post which can be verified only from the record of the post office. The Hon’ble Delhi High Court in the case of Suman Jeet Agarwal (supra) while dealing an identical issue has observed in para nos.28.7 to 31.5 as under : “28.7. We hold that, in order for this mode of transmission ie. uploading of the Notices in the E-filing portal of the assessees, to be considered valid service, the Department should have Printed from counselvise.com 14 ITA.No.344/Hyd./2025 issued a real time alert as provisioned in the aforementioned Section 144(B)(6)(7)(a) of the Act of 1961. Since, the prescribed mode of service is not followed it is akin to no due despatch of Notices, therefore it cannot be said that the Notices 1 were validly issued. 28.8. However, since the assessees in the present case did become aware of the Notices later and the assessment proceedings in their cases are still pending, we are not inclined to quash these Notices. 28.9. It has come on record that the ITBA records the time and dare when the E-filing portal is accessed by the assessee, so the first date on which the Notices were accessed by the assessees is duly available. This date will be considered by the JAOs as the date of issuance of Notices by the JAOs. Illustratively, in W.P. (C) 13888 of 2021 the Notice dated 31st March 2021 was never served on the assessee, Instead the assessee claims that he became aware of the same on 23rd November, 2021 while checking his E-filing portal, the JAO is directed to verify the date on which the Notice was first viewed by the assessee, and consider the same as the date of issuance. Regarding Novices sent to unrelated e-mail addresses 29. In a few cases, which do not fall in the categories 'A to E' as noted above, the Notices dated 31st March, 2021 were issued by the ITBA e-mail Software system to unrelated e-mail addresses which has no concem with the petitioner-assessee. In those facts, the Department cannot be permitted to contend that there was due despatch of Notice. For constituting 'due despatch', notice should be issued to the e-mail addresses duly recognized in rule 127, sub-rule 2(b) (i) to (iv), which reads as under :- Printed from counselvise.com 15 ITA.No.344/Hyd./2025 \"Rule 127, sub-rule 2(b) (i) to (iv) ** ** ** ** ** ** (b) for communications delivered or transmitted electronically - (i) e-mail address available in the income-tax return furnished by the addressee to which the communication relates; or (ii) the e-mail address available in the last income-tax return furnished by the addressee; or (iii) in the case of addressee being a company, e-mail address of the company as available on the website of Ministry of Corporate Affairs; or (iv) any e-mail address made available by the addressee to the income-tax authority or any person authorised by such income-tax authority.” 30. Additionally, it is a settled position of law that the notice under section 148 of the Act of 1961 must be served in accordance with the procedure established by law, to the correct addressee, otherwise the reassessment proceedings would be invalid in law. Chetan Gupta (supra). The issuance of e-mail attaching electronic notice to an unrelated e-mail address does not constitute as due despatch and therefore, the Notices cannot be said to have been issued on 31st March, 2021. However, in each of these matters, since an authenticated copy of the notice was placed on the registered account of the assessee on the E- filing portal, as that is how the petitioners learnt about the notices, these notices will be held to have been issued on the date. on which the Notices were first viewed by the assessees on their E-filing portal. Printed from counselvise.com 16 ITA.No.344/Hyd./2025 31. For the reasons and principles that we have laid down, we dispose of these Writ Petitions with the following directions : 31.1. Category 'A': The Notices falling under category 'A', which were digitally signed on or after Ist of April, 2021, are held to bear the date on which the said Notices were digitally signed and not 31st March 2021. The said petitions are disposed of with the direction that the said Notices are to be considered as show- cause notices under section 148A (b) of the Act as per the directions of the apex Court in the Ashish Agarwal ( supra) judgment. 31.2. Category 'B': The Notices falling under category 'B' which were sent through the registered e-mail ID of the respective JAOs, though not digitally signed are held to be valid. The said petitions are disposed of with the direction to the JAOs to verify and determine the date and time of its despatch as recorded in the ITBA portal in accordance with the law laid down in this judgment as the date of issuance. If the date and time of despatch recorded is on or after 1st of April, 2021, the Notices are to be considered as show-cause-notices under section 148A (b) as per the directions of the apex Court in the Ashish Agarwal (supra) judgment. 31.3. Category 'C: The petitions challenging Notices falling under category 'C' which were digitally signed on 31st of March 2021, are disposed of with the direction to the JAOs to verify and determine the date and time of despatch as recorded in the ITBA portal in accordance with the law laid down in this judgment as the late of issuance. If the date and time of despatch recorded is on or after 1st of April, 2021, the Notices are to be considered as Printed from counselvise.com 17 ITA.No.344/Hyd./2025 show-cause-notices under section 148A (b) as per the directions of the apex Court in the Ashish Agarwal (supru) judgment. 31.4. Category D: The petitions challenging Notices falling under category 'D' which were only uploaded in the E-filing portal of the assessees without any real time alert, are disposed of with the direction to the JAOS to determine the date and time when the assessees viewed the Notices in the E-filing portal, as recorded in the ITBA portal and conclude such date as the date of issuance in accordance with the law laid down in this judgment. If such date of issuance is determined to be on or after Ist of April 2021, the Notices will be construed as issued under section 148A (b) of the Act of 1961 as per the Ashish Agarwal (supra) judgment. 31.5. Category E: The petitions challenging Notices falling under category 'E' which were manually despatched, are disposed of with the direction to the JAOs to determine in accordance with the law laid down in this judgment, the date and time when the Notices were delivered to the post office for despatch and consider the same as date of issuance. If the date and time of despatch recorded is on or after 1st of April, 2021, the Notices are to be construed as show-cause-notices under section 148A (b) as per the directions of the apex Court in the Ashish Agarwal (supra) judgment.” 7.2. Therefore, in para-31.3 the Hon’ble Delhi High Court has observed that the JAO to verify and determine the date and time of despatch as recorded in the ITBA portal in accordance with law laid down in that Judgment and Printed from counselvise.com 18 ITA.No.344/Hyd./2025 further in para 31.5, in case of notice were sent manually through speed post, the JAO to determine the issue of notice as per the date and time when the notice were delivered to post office for despatch. Therefore, the relevant date and time, is the delivery of the notice to the post office for despatch and not the actual service effected on the assessee. The learned CIT(A) has remanded the matter back to the Assessing Officer in para 5.4 of the impugned order as under : “5.4. Under the circumstances, it is claimed that the AO issued the notices as well as the order to the appellant through the email ID: raj [e-mail] on 14.03.2022 and the aforesaid email ID pertained to the accountant who had left the company during Covid period i.e. in June 2020. The appellant submitted that there was no physical service of the notices/ Orders and due to the aforementioned reasons, the appellant submitted that it was never aware of the proceedings instituted against it. Therefore, in the interest of natural justice, I deem if fit and proper to set aside the assessment order u/s 147/144 of the Act dated 14.03.2022 for fresh adjudication. Needless to say, the AO must allow a fair and reasonable opportunity to the appellant of being heard before making a fresh assessment. At the same time the appellant is directed to comply with the hearing notices as and when called for through submission of relevant documents/ evidences before the AO. The appeal is thus decided Printed from counselvise.com 19 ITA.No.344/Hyd./2025 on this preliminary issue without going into the merits of the Grounds of appeal.” 7.3. It is clear from the impugned order that the matter on merit was remanded by the learned CIT(A) to the Assessing Officer for fresh adjudication, therefore, this issue of validity of issue of notice u/sec.148 of the Act is also remanded to the record of the Assessing Officer for proper verification and examination of the record and facts to ascertain the date and time of delivery of this notice to the post office for despatch of service to the assessee. Accordingly, the Assessing Officer is directed to consider this issue in light of Judgment of Hon’ble Delhi High Court in the case of Suman Jeet Agarwal (surpa). 8. The other issues raised by the assessee in this appeal are already remanded by the learned CIT(A) to the Assessing Officer for fresh adjudication. Therefore, we do not find any reason to interfere with the order of the learned CIT(A) to the extent of remanding of the other issues. 9. In the result, appeal of the Assessee is allowed for statistical purposes. Printed from counselvise.com 20 ITA.No.344/Hyd./2025 Order pronounced in the open Court on 15th October, 2025. Sd/- Sd/- [MADHUSUDAN SAWDIA] [VIJAY PAL RAO] ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 15th October, 2025 VBP Copy to : 1. M/s. Cognizance Constructions Private Limited, Villa # 137, Legend Chimes, Gandipet X Road, Kokapet, Hyderabad – 500 075. Telangana. 2. The Income Tax Officer, Ward-1(1), Hyderabad. 3. Pr. CIT, Hyderabad. 4. DR, ITAT “B” Bench, Hyderabad. 5. Guard file. BY ORDER, //True copy// Printed from counselvise.com "