DCIT , CORP WARD 1, COIMBATORE V. BAKERS SPICES & INGREDIENTS PRIVATE LIMITED, COIMBATORE

MA 119/CHNY/2024

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The case involves the Deputy Commissioner of Income Tax, Corporate Ward , Coimbatore as the applicant and M/s. Bakers Spices & Ingredients Pvt. Ltd. as the respondent. The core issue revolved around the validity of a notice issued under section 148 of the Income Tax Act, which was digitally signed on 31.03.2021 but e-delivered on 01.04.2021. The Tribunal initially restored the matter to the Assessing Officer following the Supreme Court's decision in Union of India vs. Ashish Agarwal, which allowed for a re-evaluation of reassessment notices under the amended provisions of the Act. The Revenue's miscellaneous application sought to challenge this restoration, arguing that the delay in e-delivery was due to technical limitations and not a procedural irregularity. However, the Tribunal dismissed the application, noting that the reassessment had been properly initiated under the amended provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790005 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 23-12-2024
• Other Referred Cases: Union of India vs. Ashish Agarwal, Suman Jeet Agarwal vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S. GIRISH KUMAR
• Keywords: Reassessment proceedings; Bonafide belief; Reopening of assessment; Bonafide mistake; Procedural lapse
• Section: 147; 148

Judgement Text

"आयकर अपीलȣय अͬधकरण,‘सी’ Ûयायपीठ, चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं Įी जगदȣश, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER िविवधया िचकासं/ M.A. No. 119/CHNY/2024 (arising in I.T.A. No.882/CHNY/2024) िनधाᭅरण वषᭅ/Assessment Year: 2016-17 The Deputy Commissioner of Income Tax, Corporate Ward – 1, Coimbatore vs. M/s. Bakers Spices & Ingredients Pvt. Ltd., 8/26, Lakshmi Nagar, Phase II, Edayarpalayam, Coimbatore – 641 025. PAN: AAECB 6010E (अपीलाथᱮ/Applicant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से /Applicant by : Ms. R. Anita, Addl.CIT ᮧ᭜यथᱮकᳱ ओर से/Respondent by : Shri S. Girish Kumar, Advocate सुनवाई कᳱ तारीख/Date of hearing : 28.11.2025 घोषणा कᳱ तारीख /Date of Pronouncement : 28.11.2025 आदेश /O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This Miscellaneous Application filed by the Revenue is directed against the order of the Tribunal dated 12.09.2024 in ITA No.882/CHNY/2024. Printed from counselvise.com 2 M.A No.119/CHNY/2024 2. The Tribunal vide its order dated 12.09.2024, restored the matter to the files of the AO to follow the procedure laid down in the judgment of the Apex Court in the case of Union of India vs. Ashish Agarwal, (2022) 444 ITR 1 (SC), whereby notice issued on 01.04.2021 was to be treated as notice issued u/s.148A of the Act as substituted by the Finance Act, 2021. The narration of facts and the findings/direction of the Tribunal read as follows:- “3. Brief facts are that the assessee company filed its return of income for relevant assessment year 2016-17 on 29.09.2016. Originally, the return was processed u/s.143(1) by CPC., Bengaluru dated 08.11.2016. Subsequently, notice u/s.148 of the Act was issued on 31.03.2021. In response to notice u/s.148 of the Act, the assessee did not file any return of income, but stated that original return filed u/s.139(1) of the Act may be treated as return filed u/s.148 of the Act and contended on merits that there was no transaction for an amount of Rs.57,71,871/- between the assessee company and Mr.Deepak Kumar Nanjyani, as addition made by the Assessing Officer and confirmed by the CIT(A). The learned counsel for the assessee first of all, challenged validity of reassessment notice issued u/s.148 of the Act by stating that notice u/s.148 was digitally signed on 31.03.2021, but dispatched on 01.04.2021. The learned counsel for the assessee drew our attention to the assessee’s paper book at page 24 & 25, wherein he has enclosed copy of notice issued u/s.148 of the Act, which is downloaded from ITBA Portal. Even, the Revenue has filed a detailed response and admitted that date and time of delivery of notice u/s.148 is 01.04.2021 at 01.30.13 AM. It means that notice was digitally signed on 31.03.2021, but on portal it was dispatched on 01.04.2021. At this point, the learned counsel for the assessee drew our attention to the decision of the Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agarwal (2022) 444 ITR 1(SC), wherein the Hon'ble Supreme Court has laid down procedure and relevant principles in para 8 are as under:- Printed from counselvise.com 3 M.A No.119/CHNY/2024 “8. However, at the same time, the judgments of the several High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151 of the IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. It is true that due to a bonafide mistake and in view of subsequent extension of time vide various notifications, the Revenue issued the impugned notices under section 148 after the amendment was enforced w.e.f. 1-4-2021, under the unamended section 148. In our view the same ought not to have been issued under the unamended Act and ought to have been issued under the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021. There appears to be genuine non-application of the amendments as the officers of the Revenue may have been under a bonafide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of IT Act, the High Courts ought to have passed an order construing the notices issued under unamended Act/unamended provision of the IT Act as those deemed to have been issued under section 148A of the IT Act as per the new provision section 148A and the Revenue ought to have been permitted to proceed further with the reassessment proceedings as per the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021, subject to compliance of all the procedural requirements and the defences, which may be available to the assessee under the substituted provisions of sections 147 to 151 of the IT Act and which may be available under the Finance Act, 2021 and in law. Therefore, we propose to modify the judgments and orders passed by the respective High Courts as under : - (i) The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be showcause notices in terms of section 148A(b). The respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices within two weeks thereafter; (ii) The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a one-time measure vis-a-vis those notices which have been issued under section 148 of the unamended Act from 1-4- 2021 till date, including those which have been quashed by the High Courts; Printed from counselvise.com 4 M.A No.119/CHNY/2024 (iii) The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees; (iv) All the defences which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 2021 and in law whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open and/or shall continue to be available and; (v) The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the IT Act irrespective of whether they have been assailed before this Court or not.” 4. The learned counsel for the assessee stated that the assessee’s case falls under clause (iii) of para 8 of the order of the Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agarwal cited supra. Further, he referred to the decision of the Hon'ble Delhi High Court in the case of Suman Jeet Agarwal Vs. ITO (2022) 143 taxmann.com 11 (Del), wherein the Hon’ble Delhi High Court has laid down certain principles, and disposed off the Writ Petition on new regime of reopening of assessment u/s.148 and 148A of the Act and laid down these principles in para 31.3 & 31.4 as under:- “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': ……… 31.2 Category 'B': ……… 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 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 Ashis Agarwal (supra) 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 Printed from counselvise.com 5 M.A No.119/CHNY/2024 accordance with the law laid down in this judgment. If such date of issuance is determined to be on or after 1st 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.” 5. The learned counsel for the assessee as well as Ld. DR agreed that the assessee’s case falls under category ‘C’ and in term of decision of the Hon'ble Delhi High Court in the case of Shri Suman Jeet Agarwal Vs. ITO (supra), the matter can be restored back to the file of the Assessing Officer for following the procedure laid down in the decision of the Hon'ble Supreme Court in the case of Shri Ashish Agarwal (supra). We noted that the Hon'ble Supreme Court in the case of UOI Vs. Shri Ashish Agarwal (supra) has categorically held in para 8(iii) and 8(iv) of its order that the Assessing Officer shall consider the notices issued u/s.148 in term of section 148A of the Act as substituted by Finance Act, 2021 and treat the show-cause notices issued in term of section 148A(b) of the Act, and the Assessing Officer shall provide within 30 days the information and material relied upon by the Revenue, so that the assessee can reply to the notices within two weeks from the date of receipt of the material. The rest of the procedure as mentioned in 8(ii), (iii) & (iv), the Assessing Officer will follow and accordingly decide the issue. However, as the Hon'ble Supreme Court has kept open all the defences, which may be available to the assessee u/s.149 and / or which may be available under Finance Act, 2021 and in law and whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open. In term of above, we restore this jurisdictional issue back to the file of the Assessing Officer for de novo consideration.” 3. Against the above order of the Tribunal, the Revenue has filed the present miscellaneous application seeking to revise the said order. The reason stated in the miscellaneous application for seeking revision of the said order reads as follows:- 6.1.1 It has been observed that, the assessee challenged the validity of notice issued u/s 148 of the Act, since the same was, although digitally signed on 31.03.2021, e-delivered only on 01.04.2021. It is brought to the kind notice of Hon'ble Tribunal that, the delay in dispatching the impugned notice online Printed from counselvise.com 6 M.A No.119/CHNY/2024 after it was digitally-signed is not attributable to the Assessing officer so as to render the whole proceedings invalid. 6.1.2 Following time stamps are relevant in this aspect: Date of notice: 31.03.2021 Date and time of Digital signature: 31.03.2021, 17.28.55 (as recorded digitally in the document) Date and time of delivery: 01.04.2021, 01.30.13 AM (as observed from the ITBA Portal) 6.1.3 System generated communications are susceptible to various technical parameters such as user traffic. The marginal delay involved here is attributable to those technical limitations. It is hereby prayed that, taking into consideration these facts, the validity of impugned notice u/s 148 may kindly be upheld by the Ld. Bench. 6.1.4 In view of the above facts, it can be reasonably presumed that, challenging the validity of notice issued u/s 148 by the assessee is a clear indication of their intention to circumvent statutory proceedings, with necessary mens rea. The decision of Hon'ble Supreme Court in the case of Shri Ashish Agarwal had brought relief to the bona-fide mistake committed by Revenue in not following the amended provisions of Act. However, the facts of the instant case do not indicate a procedural irregularity so as to bring its course in line with directions issued vide the order in case of Shri Ashish Agarwal (supra). 6.1.5 It is hereby humbly prayed that, taking into consideration, the innocuous infrastructural limitations in e-delivering notices and in view of the mala fide intention of appellant to subvert proceedings of public office, grounds raised by assessee to challenge validity of proceedings may be dismissed. 6.2.1 In addition and notwithstanding the above stated contention, it is also submitted that, there exists considerable ambiguity - as to what the further course of actions are; and the issue for which matter is remitted to AO for de novo consideration. 6.2.2 The decisive para no.5 of the order makes references to the decisions and directions issued in the cases relied on by Hon'ble Tribunal. The said paragraph did neither speak about the decision arrived at by Hon'ble Tribunal regarding validity of notice u/s 148 dated 31.03.2021, nor does it Printed from counselvise.com 7 M.A No.119/CHNY/2024 overtly direct the Assessing Officer as to what needs to be done in the circumstances of the instant case. 6.2.3 If the decision in instant case is presumed to be taken in line with the decision of Hon'ble Delhi High Court in the case of Shri Suman Jeet Agarwal Vs. ITO, then question remains as to whether the further course of action be taken under the provisions of section 148A as it stood at the time of pronouncement of said order of High Court, or under the extant provisions as amended vide Finance Act 2024? Present order of Tribunal dated 12.09.2024 is passed after the amendment of Act which brought in revised procedures u/s 148A, w.e.f. 01.09.2024. 4. The Ld.DR before the Tribunal had brought on record that the AO has complied with the directions of the Tribunal and followed the procedure laid down in para 8.3, 8.4 of the judgment of the Hon’ble Apex Court in the case of Ashish Agarwal (supra). It was stated that the order of the Tribunal was received in the office of the Jurisdictional CIT on 28.10.2024 and within 30 days, the AO vide notice dated 27.11.2024 had provided to assessee the information and material relied on by the AO for seeking reopening of the assessment. Subsequently, on receipt of assessee’s reply/objection dated 25.12.2024, order was passed u/s.148A(d) of the Act on 29.01.2025 and notice u/s.148 of the Act was issued on 31.01.2025. In light of the facts that is brought on record by the Ld.DR, since the reassessment proceedings has been set in motion within the time limit prescribed, the grievance of the Revenue raised in the miscellaneous application is without any basis. Printed from counselvise.com 8 M.A No.119/CHNY/2024 5. In the result, the miscellaneous application filed by the Revenue is dismissed. Order pronounced in the open court on 28th November, 2025 at Chennai. Sd/- Sd/- (जगदȣश) (JAGADISH) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 28th November, 2025 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Applicant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ /CIT, Coimbatore 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF. Printed from counselvise.com "