SAMIR PRAVINCHANDRA RAJDEV,RAJKOT vs. DCIT/ACIT-2(1) RAJKOT, RAJKOT

The assessee has also raised additional legal ground, which is reproduced below:

Learned Counsel for the assessee submitted that assessee vide Appeal Form in Form no. 36, has raised main legal ground challenging the reopening of assessment u/s 147 of the Act. Under the main legal ground there are various grounds which can be argued and it goes to the root of the matter. The assessee most respectfully prays before the Hon'ble Income Tax Appellate Tribunal, Rajkot to consider specific ground of appeal with respect to main ground of appeal being reopening of assessment u/s 147 of the Act. This above ground goes to the root of the matter and it is a legal ground as to the validity of reopening of assessment u/s 147 the I.T. Act, 1961. The assessee, therefore makes this prayer to admit the specific ground of appeal, with a further prayer that the same may kindly be adjudicated first. 5. On the other hand, Ld. DR for the Revenue opposed the prayer of the assessee to admit the above legal ground. 6. I have heard both the parties on this preliminary issue. I have considered the request of the assessee for admission of additional ground, which is purely of legal nature. On the basis of material available on record it is certain that additional ground raised by the assessee challenging the very jurisdiction of the assessing officer to pass assessment order is no longer res-Integra and it is well settled that an assessee can raise a legal ground at any stage of proceedings as held by the Apex Court in the case of CIT v/s. Varas Internation reported in 284 ITR 80(SC) and National Thermal Power Co Ltd. v/s CIT reported in 229 ITR 383 (SC) and Special Bench decision in the case of DHL Operators reported in 108 TTJ 152(SB). Keeping in view the facts and circumstances of the present case, I am of the view that the issue raised in 'additional ground' goes to the root of the matter and therefore needs to be admitted. Hence, I, hereby allow the assessee to raise additional ground of appeal. Since this ground raises question about the assumption of jurisdiction and validity of assessment order itself, therefore, I thought it appropriate to take up and decide this additional ground first.

Succinctly, the factual panorama of the case is that assessee before me is an Individual. A search and seizure action u/s 132 of the Income Tax Act, 1961 was conducted in the case of RUPPs group of Ahmadabad on 07.09.2022. In this case, a total of 23 Registered Unrecognized Political Parties, more than 35 bogus intermediary entities and 3 major exit providers were covered which was in combine called as RUPP group of Ahmadabad. The search was conducted after credible evidence of a scam going on in the form of donations to Political Parties for claiming bogus deduction u/s 80GGC/80GGB of the Act which are then re- routed back to the donors in cash/RTGS/NEFT or other banking channels, gathered and collated with other relevant data points. Discreet enquiries revealed that few such so called political parties are engaged in huge tax evasion racket and that these are formed for the sole purpose of aiding and abetting tax evasion and earning commission in the process. One of the striking features of the search is the finding that the aforementioned political parties have been formed by the current office bearers or have been bought from other handlers to earn commission income by running bogus donation racket. These RUPPs carry out a scam of soliciting bogus donations from various persons which is then routed through various intermediaries and returned to the donor in the form of cash/RTGS/NEFT or other banking channels, after charging a commission in the range of 1.5% to 5% of the amount donated.The assessee was one of the beneficiaries who has made donation to Rashtriya Samajwadi Party. Accordingly, assessment proceedings u/s 147 of the Income Tax Act, 1961 as provided by section 148A (d) r.w.s. 148 of the Act were initiated and order u/s 148A(d) of the Income tax Act, 1961 was passed with prior approval of the Specified Authority on 13.04.2023. Accordingly, notice u/s 148 was issued on 13-04-2023 calling for return of income for A.Y. 2019-20. 8. During the assessment proceedings, the assessing officer noticed that donation received by "Rashtriya Samajwadi Party" is bogus. The assessee has claimed deduction under Section 80GGC of the Act, of Rs.2,00,000/-, in his return of income, which was treated, by the assessing officer, as bogus deduction Page | 4 and added into total income of the assessee for assessment year (A.Y.) 2019-20. The assessing officer also noted that the assessee has claimed deduction of Rs. 3,35,970/- under section 57 of the Income tax Act, 1961 and not furnished satisfactory explanation in this regard, therefore, the amount of Rs. 3,35,970/- claimed by the assessee u/s 57 of the Income tax Act, 1961 was disallowed in the case of the assessee. 9. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the ld. CIT(A), who has confirmed the action of the assessing officer, therefore, the assessee is in further appeal before this Tribunal. 10. I have heard, both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Shri Kalpesh Doshi, learned Counsel for the assessee, vehemently argued on additional legal ground, stating that notice u/s 148 of the Act is without complying with the provisions of section 282A of the Act. The learned Counsel for the assessee, took me through the notice issued u/s 148 of the Act, which is placed at paper book no. 6 and stated that said notice u/s 148 of the Act is not signed either manually or digitally and therefore, in the absence of valid signature, the notice issued u/s 148 of the Act and the reassessment proceedings carried out is bad in law and is liable to be quashed.On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 11. I have considered submissions of both the parties. I note that a notice or an order or any other documents without having signature of the person who has issued such notice loses its relevance and importance and is to be treated as invalid. Any document without signature is not a document for execution or implementation. Therefore, it can be stated that no notice has been issued by the assessing officer. It is an undisputed fact that the notice u/s 148 of the Act issued by the assessing officer is not signed and the said notice is not in paper form but in electronic form. The provisions of section 282A deal with authentication of notices and other documents issued by the Department. With reference to the same the provision of section 282 of the Act is reproduced as under “Section 282A -Authentication of notices and other documents. (1) Where this Act requires a notice or other document to be issued by any income-tax authority, such notice or other document shall be signed and issued in paper form or communicated in electronic form by that authority in accordance with such procedure as may be prescribed. (2) Every notice or other document to be issued, served or given for the purposes of this Act by any income-tax authority, shall be deemed to be authenticated if the name and office of a designated income-tax authority is printed, stamped or otherwise written thereon. (3) For the purposes of this section, a designated income-tax authority shall mean any income-tax authority authorised by the Board to issue, serve or give such notice or other document after authentication in the manner as provided in sub-section (2) 12. It can be said from the plain reading of sub -section (1) of the section 282A of the Act that any notice or other documents to be issued by the Income Tax authorities shall have to be signed in order to make it authenticate. Therefore, a notice or other document, as referred in Section 282A (1) of the Act, will take legal effect only after it is signed by that Income-tax Authority, whether physically or digitally. The usage of the word "shall" make it a mandatory requirement. Since, the notice u/s 148 of the Act has no signature, the said notice possesses a jurisdictional defect and the whole assessment proceedings carried out subsequently become bad in law. From the bare reading of the above provisions of section 282A of the Act, it is clear that sub-section (1) to section 282A of the Act, uses word 'shall' before the words 'be signed and after the word 'signed conjunction word 'and' is used to differentiate between the mode in which the notice or document is issued, that is, either the notice or document is issued in paper form or communicated in electronic form.The requirement of signature on the notice or document issued is not merely formality but is a mandatory requirement and if such notice or document is issued in paper form, the signature shall be done manually and if the notice or document is issued / communicated electronically, the same shall bear signature of the designated income-tax authority via Digital Signature Certificate (DSC) i.e. signed digitally. The DSC Policy of 2018 mandates that every letter, notice, order, etc, issued to Assessee or other addresses within the Department or outside the Department will have to be issued by using digital signature. The reason for the same is that when notice or document is communicated in electronic form bears valid digital signature, the recipient of the same would believe that the notice or document is issued by known sender, which authenticates, that is, proves the genuineness of the notice or document issued and most importantly, neither the sender can deny having issued such notice or document nor such notice or document can be altered by any person.

I note that Section 282A(1) prior to its substitution by the Finance Act, 2016 with effect from 01-06-2016 also required the notice or document issued to be signed. Therefore, the signing the notice or document before issuing the same is pre-requisite and after evolution of e-proceedings and issuing notices/documents / order, etc, in electronic form, the Legislature amended the provisions of section 282A(1) so that such notice or document can be issued in paper form or communicated in electronic form, however, the requirement of signature is 'not dispensed' but remains and therefore, if such notice or document is issued in paper form, the same shall require manual signature and if such notice or document is communicated in electronic form, the same shall require to be signed digitally so as to make the notice or document authenticated.

The ld. Counsel for the assessee, took me through page no. 6 of the paper book and stated that notice u/s 148 dated 13.04.2023 is not signed by the prescribed Income Tax Authority, which is reproduced below:

Therefore, it is vivid that above notice under section 148 of the Act, is neither signed manually or digitally. Therefore, all consequential proceedings, including re-assessment and penalty order are invalid and liable to be quashed. For that reliance is placed on the judgment of Bombay High Court in case of Ambernath City Hospital (P) Ltd. Vs. Union of India (2026) 182 taxmann.com 68 and further reliance is placed on the judgment of the Hon’ble Bombay High Court in case of Prakash Krishnavtar Bahardwaj (2023) 150 taxmann.com 60 (Bombay) wherein it was held as follows: “INCOME TAX: Where a reopening notice under section 148 was issued upon assessee without signature of Assessing Officer affixed on it either digitally or manually, said notice was invalid and same would not vest Assessing Officer with any further jurisdiction to proceed to reassess income of assessee.Section 148, read with section 148A, of the Income-tax Act, 1961 - Income escaping assessment-Issue of notice for (Signature of A.O.)- Assessment year 2015-16. Assessee was NRI and he did file return for relevant year claiming that his total income was below maximum amount chargeable to tax - Later on, an information was received certain income of reopening notice under section 148A(b) was issued upon assessee via e-mail - Further, order under section 148A(d) was also passed and a notice under section 148 was issued upon assessee holding that it was a fit case for reopening - Assessee contended that he never received e-mail in which notice under section 148A(b) was sent and, further, when he received notice under section 148 by speed post, same was not signed by Assessing Officer, thus, said notice was invalid - It was noted that notice under section 148 issued upon assessee had no signature affixed on it either digitally or manually and, accordingly, same was invalid and same would not vest Assessing Officer with any further jurisdiction to proceed to reassess income of assessee. Whether, therefore, impugned notice under section 148A(b) and order passed under section 148A(d) and further notice under section 148 were to be set aside - Held, yes [ Para 21] [In favour of assessee]

Therefore, I note that it was not in dispute that notice issued under section 148 was unsigned and same was neither digitally signed nor manually signed by concerned Assessing Officer. The provisions of section 282A of the Act stipulates that where Act requires notice or other document to be issued by Income Tax Authority, such notice or other document shall be signed and issued in paper form or communicated in electronic form by that authority in accordance with such procedure as may be prescribed. There is a statutory mandate that a notice being issued under section 148 of the Act should be signed by concerned authority and failure to do so, would render notice invalid and it is not a curable defect under section 292B or 292BB of the Act. The notice issued u/s 148 of the Act without signature is invalid and therefore the notice issued u/s 148 is held to be bad in law and is hereby quashed. Therefore, the order passed u/s 147 of the Act is also bad in law and is required to be quashed.

Considering the above factual position and position in law, I, therefore, quash the reassessment proceedings. As the reassessment itself is quashed, all other issues on merits of the additions, in the impugned assessment proceedings, are rendered academic and infructuous.

In the result, the appeal is allowed in the terms indicated above.