Uploading Notice on E-Portal Is Not Service in the Eyes of Law: Jharkhand High Court Quashes Reassessment for Breach of Section 148 Notice Requirements

In a decisive reaffirmation of procedural due process in income tax reassessment proceedings, the Jharkhand High Court has held that failure to serve statutory notices under Section 148 and Section 142(1) on the assessee’s updated email address vitiates the entire reassessment, rendering it null and void. The Court clarified that placing notices on the Income Tax e-portal does not constitute valid service under Section 282 of the Income Tax Act, especially where the assessee had duly updated their email ID and the department had acknowledged the change.

A partnership firm engaged in road construction and mining, challenging the legality of the reassessment proceedings initiated for Assessment Year 2016–17. The Bench, comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar, quashed the entire chain of reassessment orders and penalty proceedings, holding that “jurisdictional preconditions were not met” due to the lack of valid service.

“Service of Notice Under Section 148 Is a Jurisdictional Prerequisite, Not a Procedural Formality”

The Court found that the Revenue failed to serve notices on the assessee’s registered and updated email ID, despite clear evidence that the assessee had modified its communication credentials on the Income Tax portal. The updated email (generaltraders.in@gmail.com) had been confirmed by the Department itself via a system-generated email on 22 July 2020, long before the alleged issuance of the notice under Section 148 on 31 March 2021.

Rejecting the Revenue’s defense that service on the old email ID (prafull-m@satyam.net.in) sufficed, the Court declared:

“Valid service of notice under Section 148 is a condition precedent, lest it would be a jurisdictional error. The statutory notice under Section 142 was not served upon the petitioner at its registered email address... thereby violating the principles of natural justice.”

Emphasising that reassessment jurisdiction cannot be assumed without proper notice, the Bench relied upon the language of Section 148 read with Section 282 and Rule 127 of the Income Tax Rules. The judgment reiterated that service of notice is a substantive, not procedural, requirement.

“E-Portal Is Not a Substitute for Actual Service”: Court Rejects Revenue’s Presumption of Knowledge

One of the pivotal contentions raised by the Revenue was that the notices had been uploaded to the assessee’s e-filing portal and thus deemed to be served. The Court firmly rejected this line of argument, holding that placing a notice on an electronic portal does not meet the legal requirement of service, particularly where the assessee had no reason to access or monitor the portal continuously.

Referring to the judgment of the Punjab and Haryana High Court in Munjal BCU Centre of Innovation and Entrepreneurship, the Bench observed:

“The provisions do not mention communication to be ‘presumed’ by placing notice on the e-portal. A pragmatic view has to be adopted. An individual or company is not expected to keep the e-portal of the Department open all the time... The principles of natural justice are inherent in the income tax provisions and are required to be necessarily followed.”

The Court clarified that Section 144B(6), which allows service through digital means, was inserted later and cannot retroactively validate earlier defective notices.

“Burden Lies on Revenue to Prove Service; Participation Does Not Cure Jurisdictional Defect”

Dealing with the doctrine of burden of proof in service of notice, the Court held that the onus lies squarely on the Revenue to demonstrate that notice under Section 148 was validly served in accordance with law. It stated:

“The onus is on the Revenue to show that proper service of notice has been effected under Section 148 of the Act on the assessee... In the present case, the Revenue has failed to discharge that onus.”

Relying on multiple precedents including CIT v. Chetan Gupta and Lok Developers v. Dy. CIT, the Court held that even if the assessee later participated or responded to some proceedings, this does not constitute waiver of the requirement of valid service. Furthermore, Section 292BB—which deems notice valid if the assessee doesn’t object in time—was held inapplicable, as the assessee had raised timely objections.

“When Email ID Is Updated and Acknowledged, It Is Binding on the Department”

The Court strongly criticised the failure of the Assessing Officer to verify the most recent communication details. Despite the petitioner updating its email address on the Income Tax Portal in July 2020, and receiving several subsequent departmental communications on that new ID, the critical notices under Sections 148 and 142(1) were sent to a non-functional and obsolete email ID.

The Bench stated:

“There was a legitimate expectation arising out of consistent past practice that all communications will be sent to the updated email address after the same has been successfully uploaded and acknowledged... The failure to adhere to this established protocol invalidates the entire reassessment.”

The decision underscored the mandate under Rule 127 of the Income Tax Rules, which clearly provides that notices must be sent to the address or email provided by the assessee for such communication.

“Entire Proceedings Null and Void – Matter Remitted for Fresh Consideration After Due Notice”

Concluding that the proceedings were void ab initio, the Court quashed the following:

• Notice under Section 148 dated 31.03.2021

• Notices under Section 142(1) dated 28.09.2021 and 13.01.2022

• Reassessment order under Section 147/144/144B dated 29.03.2022

• Demand notice dated 30.03.2022 for ₹55,69,827

• Penalty order under Section 271(1)(c) dated 20.09.2022 for ₹24,35,454

• Penalty order under Section 271(1)(b) dated 13.09.2022 for ₹30,000

The Bench held:

“The purported notices issued under Section 148 of the Act including reassessment proceedings under Section 147 and Section 142(1), as well as penalty orders, cannot be sustained... The same are quashed.”

The matter has been remanded to the Assessing Officer for de novo proceedings after valid service of notices and proper opportunity to the assessee. The parties have been directed to appear before the Assessing Officer on 28.11.2025.

Jharkhand High Court Reinforces That “Natural Justice Cannot Be Digitally Bypassed”

This landmark judgment sends a clear signal to tax authorities across jurisdictions: statutory compliance and procedural integrity are not optional, even in the age of faceless assessments. When an assessee has updated its profile, and the department acknowledges and uses that updated email for communication, selective reversion to an outdated contact cannot form the basis for jurisdiction under Section 148.

The ruling reaffirms a bedrock principle of tax law:

“Issuance and service of notice under Section 148 are not procedural niceties. They go to the root of jurisdiction. Failure to comply renders the entire proceeding void.”

The Jharkhand High Court's approach in M/s General Traders thus represents a robust defence of taxpayer rights and a clear judicial expectation that digitally empowered governance must also be accountable and legally compliant.

Date of Decision: 13 November 2025