S.144B Income Tax | Burden to Provide Registered Email Shifts On Assessee Only If It Can't Be Obtained From ITR/Portal/MCA Website: Allahabad HC

The Allahabad High Court has held that the provision requiring the assesee to provide his “registered email address” to the income tax authorities under Section 144B of the Income Tax Act, 1961 is residuary in nature.

The Court held that if the assessing authority is unable to obtain the registered email address from the income tax returns or from the designated portal of assesee or website of Ministry of Corporate Affairs, then it is upon the assesee to provide the email address to the authority.

Section 144B which provides modes of service was added by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 w.e.f. 1.4.2021.

Section 144B (t) defined “registered email address” as e-mail address at which an electronic communication may be delivered or transmitted to the addressee, including the email address available on the e-filing account of the assesee on the designated portal or email address available in the last furnished income tax return of the assesee or email address available in PAN database. For a registered company, registered email address could also mean the email address available on the website of Ministry of Corporate Affairs. “Registered email address” also includes the email address made available by the assessee to the income-tax authority or any person authorized by such authority.

The bench comprising of Justice Vivek Chaudhary and Justice Om Prakash Shukla held

“this Court is unable to countenance as to why the respondents without resorting to the various sub-clauses from (i) to (v) has pressed sub-clause (vi) into action. 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 Court 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).”

Factual Background

Petitioner entered into a lease/ sale agreement for a property in distress sale in 2011. The sale consideration was duly paid by the petitioner and possession of the property was taken. Petitioner was exempted from paying stamp duty on the sale consideration under the U.P. Tax and Registration Adhiniyam, 2013 and as per Tourism Policy, 2017 of the State of U.P.

The sale deed was finally executed in the AY 2019-20. The ownership of the property has been challenged before the High Court in separate proceedings. On 07.03.2023, notice under Section 148A(b) was issued to the petitioner on grounds that sale/purchase of a property amounting to Rs. 6,31,10,000/- was done during the AY 2019-20.

Petitioner alleges to have received the notice for the first time on 12.10.2023 which was issued under Section 142(1) of the Act which was sent on the previous email address which was no longer registered with its PAN number as well as on the new email ID which was linked to the PAN and mobile number of the petitioner.

Petitioner argued that the new email id had been updated by the Chartered Accountant and was being used for filing of tax returns. It was also argued that no secondary email was mentioned on the automated acknowledgements generated upon filing of tax returns.

It was argued that after gaining knowledge about the notice on 12.10.2023, petitioner confronted its earlier CA who then informed them about the issuance of notices under Section 148A. It was argued that the petitioner company had no contact with its previous CA. Accordingly, it was pleaded that petitioner had no knowledge about the proceedings.

Counsel for petitioner argued that since the notice was not served by following the procedure prescribed, the assessment was not valid.

Counsel for respondent argued that the email id on which the notice was served on the earlier email id as it was still reflecting on the tax portal of the petitioner. further it was submitted that notice was also served upon the petitioner by also uploading it on the e-filing portal of the petitioner. It was alleged that the petitioner had not informed the tax department regarding any change in email id.

Lastly, it was argued that since the petitioner has participated in proceedings under Section 142(1), the ground of non-service of notice can be taken before the authorities.

High Court Verdict

The Court observed that the respondent department had presses on the last definition of “registered email address” which is email address made available by the assessee to the income-tax authority or any person authorized by such authority which has been introduced as a residuary provision.

The Court held that if the email address is not found by the first few conditions only then can the authority resort to the email id provided by the assesee. The Court observed that the word “available” puts the burden of positive action on the assesee to provide such email id which would be construed as the registered email ID of the assessee.

The Court held that the new email id of the petitioner was mentioned in the income tax returns filed by him, in the PAN database as well as the data available on the website of the Ministry of Corporate Affairs. Accordingly, the petitioner had made available to the authority its new email id, held the Court.

“…a notice issued under Section 148A(b) of the Act, 1961 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, 1961.”

The Court relied on the decision of the Delhi High Court in Commissioner of Income Tax (Central-1) v. Chetan Gupta and Jyoti Narang v. Income tax Officer and the decisions of the Bombay High Court in Chitra Supekar v. Income Tax Officer and Lok Developers v. Deputy Commissioner of Income Tax Circle to hold that notice issued on the wrong email id cannot be construed as service of notice.

The Court quashed the notice issued under Section 148A(d) and the subsequent order passed. Further, the Court gave petitioner an opportunity to file a reply to the show cause notice issued under Section 148A(b).

Case Title: Grs Hotel Pvt. Ltd. Lko. Thru. Director Shri Ganga Charan Rajput vs. Union Of India Thru. Its Secy. (Revenue) Ministry Of Finance Govt. Of India , New Delhi And Others 2024 LiveLaw (AB) 188 [WRIT TAX No. - 228 of 2023]

Case Citation: 2024 LiveLaw (AB) 188

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