Income Tax Alert: ITAT Says E-Filing Portal Upload Alone Cannot Prove Section 148 Notice Was Issued

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The dispute may be useful for taxpayers whose reassessment cases involve a disagreement over service of notice. The short-term impact is fairly direct. If the Department relies on an electronic notice, the record showing how that notice was sent can come under examination. At the same time, taxpayers should not treat the ruling as permission to ignore notices visible on the portal. The Tribunal decided this case on its own facts.

How Can This Ruling Affect Taxpayers Facing Reassessment?

The taxpayer’s case did not turn only on whether a notice existed. The Tribunal looked at what happened after the notice was created.

Under Section 282 of the Income-tax Act, 1961, notices and other tax communications could be served through electronic records and other prescribed modes. Rule 127 dealt with the electronic addresses that could be used for such communication. Those provisions made the transmission record important when service itself was questioned.

For a taxpayer, this means the date printed on the notice may not be the only record worth checking. The registered email address, the portal entry, the communication history and the time at which the system triggered a message can all become relevant.

That point came up sharply in this case because the Revenue could show that the notice had been generated and uploaded. What it could not show before the Tribunal was proof of service or the triggering of a real-time communication.

The key case details are below.

The table also shows why the jurisdiction issue became bigger than the tax addition. The Tribunal decided that the reassessment in this case could not be valid. Because of this, it did not consider the case with respect to the correctness of the addition of ₹1,14,49,815.

Why Did The ITAT Quash The Reassessment?

The case started with bank-deposit information available to the Assessing Officer. During AY 2015-16, ₹1,14,49,815 had gone into an ICICI Bank savings account at Ballari. No income-tax return had been filed for that year.

On 31 March 2021, a notice under Section 148 was generated. The tax proceedings continued after that, with the reassessment order eventually being passed on 21 March 2022 under Section 147 read with Sections 144 and 144B.

The dispute took a different turn before the ITAT. Instead of arguing only over the cash deposits, the taxpayer challenged the very start of the reassessment proceedings. His case was that the Section 148 notice had not gone to a valid email address. He also said no real-time communication about that notice had reached him.

That objection became the deciding point. The Revenue could show that the notice existed on the e-filing system, but proof showing that it had actually been served or communicated was not produced before the Tribunal.

Why Did The Delhi High Court’s 2022 Ruling Become Important?

When the Bengaluru Bench examined the service dispute, it found support in the 2022 judgement of the Delhi High Court in the case of Suman Jeet Agarwal v. Income Tax Officer.

The timing of that case was important. It concerned Section 148 notices issued around 1 April 2021, when the reassessment provisions were moving into a new legal framework. The court had to look closely at when a notice could be treated as having actually gone out to the taxpayer, rather than merely being prepared inside the tax system.

Its view was specific. Preparing a notice, or even signing it, was only part of the process. Some further step had to take the notice out of the tax authority’s control and move it towards the taxpayer.

That reasoning fitted the Bengaluru case closely. The Department could point to generation and portal upload, but the later communication step was the part under dispute.

What Do Tax Experts Say Taxpayers Should Check?

Tax expert Mihir Tanna, Associate Director at SK Patodia LLP, has pointed out that uploading a notice to the portal can be a valid mode of service, but the supporting electronic record still deserves attention. That includes the recipient address and the date and time when the system triggered the email.

For taxpayers, this is where the ruling becomes useful in day-to-day tax compliance. A person challenging service should keep the portal record, email history and registered contact details available rather than relying only on memory of whether an alert appeared.

Timing also counts. Section 292BB of the 1961 Act provided that where an assessee appeared in proceedings or cooperated with an assessment or reassessment inquiry, the notice could be treated as duly served. The proviso protected an objection raised before completion of the assessment or reassessment. So a service objection should not be left until the case has already run its course.

According to LoansJagat, a taxpayer receiving a notice should first match the assessment year, section, DIN, recipient details, email trail and response date before sending a reply. LoansJagat has also covered checks involving AIS, Form 26AS, filed returns and tax-payment records when responding to income-tax communications.

That approach fits this ruling. The dispute was not about whether a document could be seen somewhere in the system. It was about whether the Department could show that the communication had actually moved through the required process.

Conclusion

The Bengaluru ITAT ruling came down to 1 issue: proof of communication. The Revenue could show that the Section 148 notice dated 31 March 2021 had been generated and uploaded. It could not produce evidence before the Tribunal showing service or triggering of a real-time message. The reassessment therefore failed on jurisdiction.

For taxpayers, the lesson is fairly simple. A notice on the portal should never be ignored, but the electronic trail behind that notice can become important when issuance is disputed. The email address used, portal history, dispatch record and timing may all have to be checked before the reassessment moves further.

FAQs

1. Does This Ruling Make Every Section 148 Notice On The Portal Invalid?

No. The ITAT decided a specific case where the Revenue could not prove service or real-time communication of the notice.

2. What Records Should A Taxpayer Check After Receiving A Section 148 Notice?

The taxpayer should check the assessment year, DIN, notice date, registered email, portal history and response deadline.

3. Can A Section 148 Notice Be Challenged If No Email Was Received?

It can be challenged depending on the facts, service record and timing of the objection. The portal entry alone may not settle every service dispute.

4. What If A Tax Notice Appears On The Portal But No Email Ever Comes?

The notice should still be checked and acted upon. The taxpayer should preserve the portal record and verify registered contact details quickly.

5. Did The ITAT Decide Whether The ₹1.14 Crore Addition Was Correct?

No. After quashing the reassessment for lack of jurisdiction, the Tribunal did not decide the cash-deposit addition on merits.