NAMGYAL LECHCHO,MUMBAI vs. INCOME TAX OFFICER, WD-19(2)(4), MUMBAI

Ground No. 1 raised by the assessee relates to challenging the sanction granted under section 151(1) as invalid, as the same does not contain the signature of the specified authority, i.e., the PCIT.

I have heard the counsel for both the parties, perused the material placed on record, the judgments cited before me, and also the orders passed by the Revenue Authorities. From the records, I notice that, in order to substantiate the above ground, the counsel for the assessee drew my attention to Paper Book pages 6 to 8, which contain the approval granted under section 151 of the Income-tax Act, 1961, in the case of the assessee. On page No. 7 of the said approval, at paragraph 22, it was pointed out that the approval has been granted by the PCIT, Mumbai-19, on 23.02.2024. However, the same has not been signed either physically or digitally. According to the assessee, since the said approval granted under section 151 2 of the Act has not been signed either physically or digitally, the same is bad in law.

Contrarily, the learned DR appearing on behalf of the Department drew my attention to section 282A of the Act and submitted that the name of the officer who granted the approval is specifically mentioned. Thus, according to him, in the absence of any signature, the said approval cannot be held to be bad in law.

After having heard the counsel for both the parties at length and after perusal of the relevant pages of the record, more particularly the approval granted under section 151 of the Income-tax Act, 1961, I find that section 282A is divided into different parts. Therefore, it has become necessary to examine the said section before deciding the merits of the ground raised by the assessee. The same is reproduced below:

After considering the provisions of section 282A of the Income-tax Act, I am of the view that the expression "shall be signed" used in section 282A(1) makes the signing of the notice or other document by the prescribed authority a mandatory requirement.

In my view, it is not a ministerial act or an empty formality which can be dispensed with. "Signed" means to sign one's name so as to signify assent or authentication. It means to attest by signing, or where a person is unable to write his name, by affixing his mark. Thus, the document must be signed or marked in such a way as to make it appear that the person signing it or affixing his mark is the author thereof.

Therefore, a notice or document as referred to in section 282A(1) will take legal effect only after it is signed by the Income-tax Authority, whether physically or digitally. The use of the word "shall" makes it a mandatory requirement. In this regard, reliance is placed on the decision of the Hon'ble Allahabad High Court in Vikas Gupta v. Union of India [2022] 142 taxmann.com 253 (Allahabad), the decision of the Coordinate Bench of the Tribunal in J. Kumar Infraprojects Ltd. v. DCIT [2025] 176 taxmann.com 193 (Mumbai-Trib.), and Gopal Snacks Pvt. Ltd. v. ACIT, ITA Nos. 498 & 499/RJT/2025 (Rajkot-Trib.).

Thus, after considering the facts of the case, I find that it is an undisputed fact that the approval accorded under section 151 of the Act by the appropriate authority in the present case is not signed. The requirement of signing the notice or document, as held above, is not a mere formality but a mandatory requirement. If such notice or document is issued in paper form, it shall bear a manual signature. If the notice or document is issued or communicated electronically, the same shall bear the digital signature of the designated Income-tax Authority by way of a Digital Signature Certificate (DSC).

The DSC Policy, 2018 mandates that every letter, notice, order, etc., issued to the assessee or any other person, whether within the Department or outside the Department, shall be issued using a digital signature. The reason is that when a notice or document is communicated in electronic form with a valid digital signature, the recipient is assured that the notice or document has been issued by a known sender, thereby authenticating and proving its genuineness. Most importantly, neither can the sender deny having issued it nor can such notice or document be altered by any person without detection.

Thus, in my view, section 282A(1), prior to its substitution by the Finance Act, 2016 with effect from 01.06.2016, also required the notice or document to be signed. Therefore, signing the notice or document before issuing the same is a prerequisite. After the evolution of e-proceedings and the issuance of notices, documents and orders in electronic form, the legislature amended the provisions of section 282A(1) so that such notice or document could either be issued in paper form or communicated electronically. However, the requirement of signature was not dispensed with but continues to remain mandatory. Therefore, if such notice or document is issued in paper form, it shall require a manual signature, and if communicated electronically, it shall require a valid digital signature so as to authenticate the notice or document.

In this regard, the decision of the Hon'ble Allahabad High Court in Daujee Abhushan Bhandar (P.) Ltd. v. Union of India [2022] 136 taxmann.com 246/286 Taxman 623/444 ITR 41 (Allahabad) clearly makes a distinction between the signing of a notice and its issuance or communication. It has been held that, as per section 282A(1), if a notice or document is issued or communicated electronically, it must bear a digital signature before its issuance.

Similarly, in Vikas Gupta v. Union of India [2022] 142 taxmann.com 253/289 Taxman 443/448 ITR 1 (Allahabad), it has been held that an unsigned approval under section 151 is not an authenticated document and is invalid. Consequently, the Assessing Officer had no jurisdiction to issue a notice under section 148.

Further, in Reuters Asia Pacific Ltd. v. Dy. CIT, International Tax [2023] 157 taxmann.com 705/205 ITD 31/110 ITR(T) 609 (Mumbai- Trib.), while examining the validity of an unsigned assessment order served upon the assessee, the provisions of section 282A read with Rule 127A of the Income-tax Rules, 1962 were considered, and it was held that before a notice or order is issued or communicated to the assessee, the same has to be duly signed.

Therefore, in view of the above findings, I hold that the approval granted under section 151 without being signed is invalid. Consequently, the Assessing Officer did not validly assume jurisdiction to issue the notice under section 148. Hence, the notice issued under section 148 is held to be bad in law for want of valid assumption of jurisdiction and is accordingly quashed.

Consequently, the assessment order passed under section 143(3) read with section 147 of the Act for the year under consideration is also held to be bad in law and is hereby quashed.

Since Ground No. 1 has been allowed and the assessment order passed under section 143(3) read with section 147 has been quashed, the other grounds raised by the assessee do not require adjudication and have become infructuous.

In the result, appeal filed by the Assessee stands allowed.