Sri Sai Kumar Mateti vs. Income Tax Officer

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WP/15169/2022HC TelanganaHBHC01020188202206 November 2023Bench: P.SAM KOSHY,N.TUKARAMJI7 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the notice dated 31/03/2021 issued under Section 148 of the Income Tax Act, 1961, is bad in law and requires to be set aside/quashed. The reasoning was based on the plain reading of Section 282A(1) of the Act, which mandates that any notice or document issued by an Income Tax authority must be signed either manually or digitally. This requirement is of mandatory force. Since the impugned notice lacked either a manual or digital signature of the issuing authority, it failed to comply with the mandatory provisions of Section 282A(1). Consequently, the reassessment proceedings initiated pursuant to this notice were also held to be bad in law. The Court, however, reserved the right of the respondent-Department to initiate appropriate proceedings afresh, subject to compliance with the law, as the interference was on a technicality. The Writ Petition was allowed, with no order as to costs.

What were the facts?

The petitioner, Sri Sai Kumar Mateti, challenged a notice dated 31/03/2021 issued under Section 148 of the Income Tax Act, 1961, for reassessment for Assessment Year 2013-14. The petitioner argued the notice was non-est in law and reassessment proceedings were illegal. The respondents, the Income Tax Officer and the National Faceless Assessment Centre, contended that the notice was duly served and the assessee appeared. They also argued that a missing digital signature on the Section 148 notice would not render it invalid. The High Court noted that both the petitioner's copy and the department's copy of the notice were identical and lacked any manual or digital signature.

What were the issues?

1. Whether the notice dated 31/03/2021 issued under Section 148 of the Income Tax Act, 1961, is non-est in law and consequently, whether the reassessment proceedings are illegal and without jurisdiction, turning on the requirement of Section 282A of the Act. Assessee's Contention: The notice is non-est in law and the reassessment proceedings are illegal and without jurisdiction because the notice lacks a manual or digital signature, violating mandatory provisions. Revenue's Contention: The notice under Section 148 of the Act, 1961, has been duly served, and the assessee had entered appearance and submitted a response. A notice under Section 148 not bearing a digital signature would not render the document non-est or bad in law. A subsequent notice under Section 151 was duly signed digitally.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 151,Section 282A

AI-generated summary — verify with the full judgment below

[ 337e ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) IVONDAY, THE SIXTH DAY OF NOVEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 15169 OF 2022 Between: Sri Sai Kumar lvlateti, Plot No. 8/C, Power Loom Block, Kattedan, Rajendra Nagar, Ranga Reddy - 500077, Telangana ...PETITIONER AND 1 lncome Tax Officer, Ward 8(1 ), Signature Towers, Opp. Botanical Gardens, Kondapur, Hyderabad. National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No.401, 2nd Floor, E-Ramp, Jawaharlala Nehru Stadium, Delhi. ...RESPONDENTS Petitlon under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ or order more particularly one in the nature of writ of mandamus holding that the Notice dated 3110312021 issued by the 'l st Respondent with DIN and Notice No. ITBA/ASTlsl14Bl2O20-2111032100356(1) is nonest in law and consequently hold that the reassessment proceedings conducted by the 2nd Respondent pursuant to the said notice, is illegal and without jurisdiction and set aside the same. lA NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings on the file of 2nd Respondent taken up pursuant to 2

issuance of notice dated 31/03/2021 issued under section '148 of the Act with DIN and Notice No. ITBA/AST/Sl 1 4812020-2111 032 1 00356( 1 ). lA NO: 2 OF 2022 Between: 1. lncome Tax Officer, Ward 8(1), Signature Towers, Opp. Botanical Gardens, Kondapur, Hyderabad. 2. National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No.401 , 2nd Floor, E-Ramp, Jawaharlala Nehru Stadium, Delhi. .,.PETITIONERS/RESPONDENTS AND Sri Sai Kumar Mateti, Plot No. B/C, Power Loom Block, Kattedan, Rajendra Nagar, Ranga Reddy - 500077 , Telangana RESPONDENT/PETITIONER Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the interim order in l.A.NO.1/2022 in W.P.No.15169 of 2022, dt. 24.03.2022. Counsel for the Petitioner : SRI A.V.RAGHU RAM Counsel for the Respondents: SRI A.RADHA KRISHNA, (Sr. SC For lT DEPT) The Court made the following: ORDER

Y THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUI(ARAMJI WRIT PETITION No.15169 OF 2022 JUDGMENT: (per Hon'ble Sri Justice P.SAM KoSHY) The challenge in the present Writ Petition is to the notice, dated 31.O3.2021 under Section 148 of the Income Tax Act, 1961 (for short "the Act, 1961") for reassessment for the Assessment Year 2013-14 on the ground of escape assessment within the meaning of Section 147 of the Act, 196I. 2. This Court, while entertaining this Writ Petition on 24.03.2022, on the ground that impugned notice did not bear the signature of the issuing authority either manua-l or digital, had stayed further proceedings of the impugned notice. The Department was put on notice aIId they have hled their counter. In the counter, the respondents, though contended that the notice under Section 148 of the Act, 1961 has been duly served upon the assessee, and the assessee had duly entered appearance before the authority concerned, and submitted their response. Subsequently, notice under Section 151 of the Act, 1961 was also issued which was duly signed with digital signature. Therefore, in case if a notice under Section 148 of the Act, 1961 does not bear a digitaJ I \

srgnaturc by itself would not non-est or bad in law. 2 PSI(,J & IV?&J W.p.No. tst69 of 2O22 render the said document either 3. It would be relevant at this juncture to take note of the fact that Annexure-pl which is put to challenge in this Writ petition is the same document which is also being enclosed by the Department along with their counter as Annexure R_2. Both these documents which are one and the same, and do not bear either marual signature or the digrtal signature of the authoritv concerned who issued the same. 4. In this context, it would be relevant at this juncture to take note of the provision of Section 2g2(A) ol the Act, i96 1. and for ready reference, it is reproduced hereunder:_ "2824. (l) Where this Act requires a notice or other docLtment to be issued bg-anA lncome-tax authoritA, such notice or other doaiment shall be siqned and issuJd in paper form or communicated in eleitronic jr;" oo ,no["noirrnoary i, accordance u.tith such procedurZ as ma{ be pr""ii.a. (2) Euery notice or other document to be issued, serued. or giue.n for the purposes of this Act ig -""i"'ii;;"rr. authoitg. shatt be deemed_ to be authenicate'; i';;""o*" and offtt:e of _a designated income_tax authoritA is pnnted., stamped or othenuise uitten thereon. F), fo.r. n1 ny_ncoses o/ Ihr's section, a designated income_tax i,yrn?:rA shall mean anA income-tox authiitg autLnised by the Board to issue, serue or giue such Totice or other document afi.er authentication in the manner i- priiana in sub-section (2)." I

4.7 ,f 3 PSK,J & NTR,J w.P.No.75769 o:f 2022 5. From the plain reading of the aJoresaid provision of law under sub-Section (1) of Section 282A clearly envisages that when the Department intends to issue a notice, the same has to be duly signed either manually or digita,lly. The said provision has a mandatory force of law. This requirement under sub-Section (1) of Section 282A is missing in the notice issued under Section 148 of the Act, 196 1 by the Department. Since there is a mandatory requirement for compliance of sub-Section (1) and (2) of Section 282A, and, in the absence of there being a signature either manual or digital of the authority concerned issuing the same, which is the requirement under sub-Section (1), we are of the considered opinion that the notice under Section 148 of the Act, 1961 to the aforesaid extent is bad in law and the consequential proceedings initiated wouid also therefore become bad. Thus, we a-re of the considered opinion that the impugned notice under Section 148 of the Act, 1961 therefore requires to be set-aside/quashed, and is accordingly set-aside. 6. However, the right of the respondent - Department stands reserved to initiate appropriate proceedings afresh, if they so , I

4 PS.I(,J 66 fffR,J W.P.No.15769 of 2022 desire, against the assessee, subject to the initiation being in accordance with law. The right of the Department is being reserved only for the reason that the interference by this Court is only on technicality of the notice issued under Section 148 of the Act, 1961 having not met the requirement as is prescribed under Section 282(Ll(l) ofthe Act, 1961. 7. In view of the above discussions, this Writ Petition stands allowed. There shall be no order as to costs Consequently, miscellaneous applications pending, if any, shall stand closed //TRUE COPY// Sd/. K. VENKAIAH ASSISTANT REGISTRAR "i'1'/ SECTION OFFICER To, The lncome Tax Officer, Ward 8(1)' Signature Towers' Opp Botanical eridens, KondaPur, HYderabad' The lrilinistrv of Finance, r'laiiiial Faceless Assessment Centre' lncome Tax ffi#iH;i n"l, r'r"lor' iiJir"6i' i-namp' Jawaharlala Nehru stadium' Delhi. 6il"cc to SRI A.V.RAGHU RAM, Advocate- t-oPy-cl- 6nE EE i" Siii n.nnbHA (irbrii'rir, iS..' Sc For rr oEPr)' [oPUc] Two CD CoPies. 1 2 .) 4q BSK MP .-.P

HIGH COURT DATED:0611112023 ORDER WP.No.15169 of 2022 ALLOWING THE WRIT PETITION WITHOUT COSTS { u3 1trE STATG ( q oo 2 B tll! 2i23 o * * f-o c AT E D 2\ \\ )9

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