DCIT vs. SBC Minerals Pvt. Ltd
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, in a detailed order dated 21st February 2025, has dismissed the Revenue’s appeal in the case of DCIT vs. SBC Minerals Pvt. Ltd. (ITA No. 3411/Del/2024), holding that the reassessment proceedings initiated u/s 147 were invalid due to a digitally signed notice being issued post limitation period.
Case Highlights
- Original Scrutiny Assessment u/s 143(3) was completed on 26.12.2017.
- Reassessment notice u/s 148 dated 31.03.2021 was digitally signed only on 01.04.2021.
- AO made addition of ₹3 crore u/s 69A for alleged accommodation entries based on vague inputs from the Himanshu Verma group case.
- Assessee contended that the reassessment was bad in law for two reasons:
- The notice dated 31.03.2021 was digitally signed and thus “issued” only on 01.04.2021, beyond the 6-year limitation period.
- No failure to disclose material facts was cited by the AO in the reasons recorded, violating proviso to Section 147 for reopening beyond 4 years.
Key Tribunal Findings:
1. Notice “Issued” Date is Date of Digital Signature
- Relying on Section 282A of the Income Tax Act and Section 13 of the Information Technology Act, 2000, the ITAT agreed with NFAC that a digitally signed notice cannot be considered “issued” before signing.
- Since the digital signature was done on 01.04.2021, the reassessment was barred by limitation under old Section 149.
- The footnote on the notice itself read: “If digitally signed, the date of digital signature may be taken as date of document.”
2. Supreme Court Ratio in Rajeev Bansal Applied
- Tribunal relied on the Supreme Court’s order in Rajeev Bansal (CA No. 8629/2024) and Ashish Aggarwal (2023) 1 SCC 617, where the Court held that:
“Reassessment notices issued under unamended section 148 before 01.04.2021 will be deemed show-cause notices u/s 148A(b)… if validly issued.” - In this case, however, notice was not validly issued before 01.04.2021 due to digital signature timestamp, hence TOLA and CBDT Instruction 1/2022 became applicable, rendering the reassessment void.
Additional Observations:
- The AO did not obtain sanction from the Principal Commissioner as required under amended law.
- Further, Section 148A(d) procedure was not followed, as the case was wrongly proceeded under pre-2021 law.
- Thus, the entire reassessment collapsed, including the ₹3 crore addition and the AO’s order under Section 144.
Conclusion:
This decision reinforces two core legal principles:
- Digitally signed notices are issued only when signed, not when dated.
- Jurisdictional defects, especially regarding notice and sanction, go to the root and vitiate the entire reassessment.
The ITAT’s detailed reliance on NFAC’s legal interpretation, Section 282A, SC precedent, and CBDT’s own instructions makes this an important ruling for future reassessment challenges post-2021 reforms.