The Income Tax Appellate Tribunal, Delhi, has clarified that reassessment proceedings initiated under the pre-2021 regime are invalid if the notice under Section 148 of the Income Tax Act is not dispatched to the assessee before 01.04.2021, regardless of when it was generated on the ITBA portal. This ruling reinforces procedural compliance as a jurisdictional requirement.
Background & Facts
The Dispute
The appellant, Monica Pahuja, was subjected to a reassessment for Assessment Year 2013-14 under Section 147 read with Section 144B of the Income Tax Act, 1961. The reassessment was initiated by the National Faceless Assessment Centre, Delhi, following the issuance of a notice under Section 148. The appellant challenged the validity of the entire reassessment process on the ground that the notice was not dispatched within the statutory time limit under the old regime.
Key Facts
- The notice under Section 148 was generated on the ITBA portal on 31.03.2021
- The notice was physically communicated to the assessee on 16.04.2021
- The Finance Act, 2021, introduced a new regime for reassessment, effective from 01.04.2021
- Under the old regime, the time limit for issuing a notice under Section 148 was 31.03.2021
- The revenue department did not dispute the dates of generation or dispatch of the notice
- The assessee submitted screenshots from the ITBA portal as evidence of the dispatch date
Procedural History
- 01.03.2022: Reassessment order issued under Section 147 read with Section 144B
- 11.06.2024: Order of the National Faceless Appeal Centre (NFAC), Delhi, confirming the reassessment
- 26.02.2026: Hearing before ITAT Delhi
- 29.04.2026: Judgment pronounced
Relief Sought
The appellant sought quashing of the reassessment order dated 01.03.2022 on the ground that the notice under Section 148 was issued beyond the statutory deadline, rendering the proceedings void-ab-initio.
The Legal Issue
The central question was whether the issuance of a notice under Section 148 of the Income Tax Act on 31.03.2021, but its actual dispatch to the assessee on 16.04.2021, satisfies the time limit under the pre-2021 regime, or whether the proceedings are vitiated by non-compliance with the statutory requirement.
Arguments Presented
For the Appellant
The appellant contended that the notice under Section 148 was not effectively communicated until 16.04.2021, which fell after the cutoff date of 01.04.2021. Reliance was placed on Suman Jeet Agarwal v. ITO (2022) 143 taxmann.com 11 (Delhi), where the Delhi High Court held that mere generation of the notice on the ITBA portal does not constitute compliance with the statutory requirement of issuance. The appellant argued that the notice must be dispatched before 01.04.2021 to fall within the old regime, and failure to do so renders the reassessment proceedings void.
For the Respondent
The revenue department did not dispute the dates of generation or dispatch of the notice. No evidence was adduced to contradict the assessee’s submission that the notice was received on 16.04.2021. The department did not argue that the notice was dispatched before 01.04.2021, nor did it invoke any exception or equitable ground to justify the delay.
The Court's Analysis
The Tribunal noted that the assessee had provided uncontroverted documentary evidence - screenshots from the ITBA portal - establishing that the notice was dispatched on 16.04.2021. The revenue failed to rebut this evidence. The Tribunal emphasized that the statutory requirement under the old regime was not merely the generation of the notice, but its actual issuance and communication to the assessee within the prescribed period.
"Merely generation of notice u/s 148 on ITBA software is not sufficient and dispatch is necessary to sustain the proceedings under old regime."
The Tribunal relied on the binding precedent of the Delhi High Court in Suman Jeet Agarwal v. ITO, which held that the date of dispatch, not the date of system generation, determines the applicability of the old or new regime. The Tribunal observed that the Finance Act, 2021, introduced a new procedural framework effective from 01.04.2021, and any notice issued after that date must comply with the new regime’s requirements. Since the notice in this case was dispatched after the cutoff, the reassessment proceedings could not be sustained under the old regime.
The Tribunal further held that the failure to comply with the mandatory procedural requirement under Section 148 is not a mere irregularity but goes to the root of jurisdiction, rendering the entire reassessment void-ab-initio.
The Verdict
The appeal was allowed. The impugned reassessment order dated 01.03.2022 was quashed. The reassessment proceedings initiated under Section 147 read with Section 144B for Assessment Year 2013-14 are set aside. No costs were awarded.
What This Means For Similar Cases
Notice Dispatch Date Is Jurisdictional
- Practitioners must verify the actual dispatch date of Section 148 notices, not just the system-generated date
- Any notice dispatched on or after 01.04.2021 must be challenged as invalid if invoked under the old regime
- The burden shifts to the revenue to prove timely dispatch; mere portal generation is insufficient
Pre-2021 Reassessment Validity Now Hinges on Delivery
- Cases pending with ITATs or High Courts involving notices generated on 31.03.2021 but dispatched later must be argued on the basis of Suman Jeet Agarwal
- Taxpayers can now successfully challenge reassessments where the notice was delayed due to administrative backlog
- Revenue authorities must ensure internal protocols guarantee dispatch within the statutory window
Procedural Compliance Trumps Substantive Claims
- Even if the reassessment is substantively justified, failure to comply with Section 148’s procedural mandate invalidates the entire proceeding
- Courts will not entertain equitable arguments to validate procedurally defective notices
- This ruling reinforces the principle that jurisdictional defects cannot be cured by subsequent action
