What is registered e-mail address of assessee for issue of notice u/s 148A(b)? High Court explains

What is registered e-mail address of assessee for issuance of notice u/s 148A(b)? Allahabad High Court explains, quashes re-assessment proceedings for notice sent to wrong email id.

In a recent judgment, Hon’ble Allahabad High Court has explained the provisions of section 144B in determining the registered e-mail address of assessee for issuance of notice for escapement of income u/s 148A(b) of the Income Tax Act, 1961

ABCAUS Case Law Citation:
ABCAUS 3882 (2024) (02) HC

Important Case Laws relied upon by parties:
Jyoti Narang Vs Income tax Officer
Commissioner of Income Tax vs Chetan Gupta: 382 ITR 613
Chitra Supekar Versus Income Tax Officer
Lok Developers Vs Deputy Commissioner of Income Tax Circle

In the instant case, the Petitioner assessee had challenged the order passed by the Assessing Officer (AO) under Section 148A(d) of the Income Tax Act, 1961 (the Act) and the consequential notice issued under Section 148 of the Act along with the consequential proceedings undertaken subsequent thereto.

The Petitioner assessee was a private limited company. The case of the Petitioner was that for the first time, they received a notice under Section 142(1) of the Act which was sent to the petitioner on its previous mail address registered on the portal of the Income Tax Department, which was no more registered for the assessee’s PAN.

It was submitted that the company had changed its Chartered Accountant three years ago and he has changed the registered email id of the company on the income tax e-filing portal. According to assessee, he came to know about the notice u/s 142(1) because it was also sent as a copy to the petitioner’s registered email address on the portal of the Income Tax Department and this is how it came to learn about the said proceedings. It was also pleaded that the petitioner had been using the present registered email I.D. and registered phone, for filing of their income-tax return for the last three years.

It was submitted that the notices under Section 148A and subsequent notice under Section 133 of the Act were sent by the Department to the email id of his previous chartered accountant who was not continuing any professional or personal relation with the Company. According to the petitioner, for the first time, a notice for escapement of income under Section 148A (d) of the Act came into his notice only after the final order under section 148 of the Act along with the notice under Section 148 had already been issued.

It was submitted that notice under Section 148A(b) was not received by the petitioner because of the mistake committed by the department, the petitioner was not able to file any reply to the same and unfortunately in the absence of any reply from the side of the petitioner, as per procedure, the department of Income Tax has passed an order under clause (d) of Section 148A of the Act stating that the same has been passed after getting approval of the specified authority. According to the petitioner, this order indicated the incorrect email of the assessee/petitioner, which was the previous email I.D. of the petitioner registered on the portal of the income tax department, although the presently registered email ID of the petitioner on the portal of the income tax department is different.

It was contended that section 148A has been introduced with the legislative intent to provide opportunity of hearing to the assessee before issuing notice for re-assessment under section 148 of the Act. Clause (b) of Section 148 of the Act provides the right of hearing to the assessee by serving him a show cause notice. Thereafter, the Clause (c) of Section 148 of the Act mandates the assessing authority for consideration of reply submitted by the assessee and thereafter the final order/ decision with respect to the finding that whether the case in hand is fit case for issuing notice under section 148 or not be passed is provided under clause (d) of Section 148 of the Act. In order to complete this entire procedure, the service of notice/procedure for service is provided under Section 144B of the Act.

It was argued that the impugned order under Section 148A(d) and the notice under Section 148 of the Act has been passed on the premise that notice has been sent on the registered mail ID of the petitioner but he failed to respond the same. Thus, the order impugned has been passed on wrong foundation and, accordingly, having no value in the eyes of law. Thus, it was prayed that the order passed under Section 148A(d) of the Act and all the consequential notices including the notice may be quashed.

The Hon’ble High Court observed that the admitted fact was that there existed two email ID of the petitioner-Company. The petitioner stated that the earlier email id was used till three years before and present email ID having been in operational since last three years. Although, the Department had not denied the present email ID, however, they contended that earlier email ID continued to be the registered email ID of the petitioner. The Department had also not denied the fact that the notice under Section 148A (b) of the Act and the consequential order dated 148A(d) of the Act was sent to the earlier email ID.

What is registered e-mail address of assessee for issuance of notice u/s 148A(b)?

In view of the above, the Hon’ble High Court opined that the issue arises as to what is the registered e-mail address of the petitioner as on the date of issuance of notice under Section 148A (b) of the Act.

The Hon’ble High Court observed that explanation (t) of Section 144B of the Act defines registered email address as follows :-

(i) the email address available in the electronic filing account of the addressee registered in designated portal; or

(ii) the e-mail address available in the last income-tax return furnished by the addressee; or

(iii) the e-mail address available in the Permanent Account Number database relating to the addressee; or

(iv) in the case of addressee being an individual who possesses the Aadhaar number, the e-mail address of addressee available in the database of Unique Identification Authority of India; or

(v) in the case of addressee being a company, the e-mail address of the company as available on the official website of Ministry of Corporate Affairs; or

(vi) any e-mail address made available by the assesse to the income-tax authority or any person authorised by such authority

Although it was contended by the Department that the notice under Section148A(b) of the Act, 1961 had been sent to the petitioner on the email ID made available by the assessee so as to satisfy the sub-clause (vi) of the section 144B of the Act. However, the Court was unable to countenance as to why the Department without resorting to the various sub-clauses from (i) to (v) has pressed sub-clause (vi) into action.

The Hon’ble High Court went on to explain that no doubt, all the sub-clauses are alternative to each other and each of them indicate independent mechanism for determination of the registered email address, but the it cannot be oblivious to the fact that sub-clause (vi) has been inserted by the legislature as a residual provision to determine the registered email address, when the registered email address of the assessee cannot be determined by the mechanism as provided from sub-clauses (i) to (v). Thus, if the registered email address of the assessee cannot be determined from (a) e-filing account of the addressee registered in designated portal or (b) from the last income tax return furnished, or (c) from the permanent Account number data base relating to the addressee or (d) from the official website of the Ministry of corporate affairs, etc. then only the authority may resort to any e-mail address made available by the assessee. Further, the word “available” is of significance as it records a positive action on the part of the assessee in making available the e-mail ID, so that the same may be construed as the registered email ID of the assessee.

The Hon’ble High Court further observed that it had been the consistent stand by the petitioner that he had used or made available the present e-mail ID for e-filing of his income-tax return even since the last three Assessment Years and the same has been used by him even for filing of the latest income-tax return. Further, the said email ID had been also mentioned by him in the incometax return and the same is relatable to PAN data base and also mentioned in the master data of the petitioner’s Company as available from the official website of the Ministry of Corporate Affairs at the relevant time. Therefore, taking a holistic view of the matter, it has to be held that the present e-mail ID is the registered e-mail address of the petitioner company and it is the e-mail ID, which had been made available to the Authority by the assessee.

Notice u/s 148A(b) of the Act to the registered email ID of the assessee is not an empty formality

Further, the Hon’ble High Court opined that a notice issued under Section 148A(b) of the Act to the registered email ID of the assessee is not an empty formality as the issuance of the notice and service of such notice upon the assessee are jurisdictional requirement that must be mandatorily complied with as it provides an opportunity to the addressee to satisfy the Assessing Officer with his reply, even before the issuance of the notice under Section 148 of the Act. The said right of the assessee has to be understood in the context that before the issuance of the notice under section 148 of the Income Tax Act, the Assessing Officer is enjoined upon as per section 148A (d) of the Act to decide, on the basis of material available on record including reply of assessee, whether or not it is a fit case to issue a notice under Section 148 of the Act, 1961, by passing an order.

The Department also contended that said point was not raised by the petitioner in the re-assessment proceedings presently pending before the Assessing Officer and in a way has contended that the said issue stands waived by the petitioner. The Hon’ble High Court noted a judgment passed by the Delhi High Court, wherein the Division Bench dealt with challenged on similar grounds. The Division Bench not only dismissed the appeal of the department, but also held that under Section 148 of the Act, the issue of notice to the Assessee and service of such notice upon the Assessee are jurisdictional requirements that must be mandatorily complied with. They are not mere procedural requirements. It was further held that section 292BB is prospective. In any event the assessee in the present case, having raised an objection regarding the failure by the Revenue to effect service of notice upon him, the main part of Section 292BB is not attracted

Further the Hon’ble High Court noted  the judgment of the Bombay High Court on the question as to whether subsequent proceedings initiated by the revenue authorities for non-compliance of notice under Section 148 under the Act would be vitiated on account of notice under Section 148 of the Act being served on the secondary email id registered with PAN instead of the registered primary email id or updated email ID filed with the last return of income. The Division Bench held that it was imperative for the AO to have checked if there was change of address before initiating a proceeding: and that a valid service of notice under section 148 is a condition precedent lest it would be a jurisdictional error.

Further, it was noted that the Delhi High Court has recently set aside the penalty and demand notice on the ground that the show cause notice was issued on a wrong E-mail ID.

Accordingly, the Hon’ble High Court quashed the order passed under Section 148-A(d) of the Act and the notice issued under Section 148 of the Act as also the consequential proceedings undertaken subsequent thereto being unsustainable in the eyes of law. The parties were relegated to the stage of reply of notice under Section 148A(b) of the Act.

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