SANGITA PRAMOD HARLALKA ,MUMBAI vs. INCOME TAX OFFICER WARD 23(3)(6), MUMBAI
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: JUSTICE (RETD.) C V BHADANG & MS PADMAVATHY S, AM
Per Padmavathy S, AM:
These appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [In short 'CIT(A)']
passed under section 250 of the Income Tax Act, 1961 (the Act) dated 07.05.2025
for Assessment Year (AY) 2014-15. The assessee through ground no.1 has raised the legal contention that the assessment order is unsigned and therefore invalid.
The ld. AR during the course of hearing submitted that if the said legal ground is 2 ITA 4167/Mum/2025
Sangita Pramod Harlalka adjudicated in favour of the assessee then the rest of the grounds on merits would become academic.
The assessee is an individual and filed the return of income for AY 2014-15 on 06.01.2015 declaring a total income of Rs. 2,28,520/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The AO noticed that the assessee has earned Short Term Capital Gains (STCG) from transfer of alleged penny stock and accordingly called on the assessee to file the necessary details. The assessee filed various details as called for by the AO. However, the AO did not accept the submissions of the assessee and proceeded to make an addition towards the entire sale consideration of Rs. 81,51,522/- under section 68 of the Act. The AO also treated 2% of the sale consideration i.e. Rs. 1,63,030/- as addition under section 69C of the Act. Before the CIT(A) the assessee raised the contention that the order of the AO is unsigned and therefore not valid. The assessee also raised grounds contending the issues on merits. The CIT(A) did not adjudicate the legal ground and confirmed the addition made by the AO on merits. Aggrieved the assessee is in appeal before the Tribunal.
The ld. AR submitted that the order of the AO is not signed and the unsigned order is not valid order. The ld. AR in this regard drew our attention to the remand report called for by the CIT(A) during the course of appellate proceedings and the AO in the said remand report has admitted the fact that the assessment order is not signed. The relevant extract from the remand report is as given below:
“In this regard, it is submitted that physical record of the assessee for the year under consideration is not available with this office. On perusal of assessment order, copy of demand notice and copy of computation in ITD system, it is noticed that the assessment order is not signed, however the demand notice dated
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30.12.2016 is duly signed by the AD and computation of the assessed income has been done through ITD system on 30.12. 2016 as per assessment order. Further, register entry of assessment order in demand and collection register also appeared on the top of first page of assessment order and computation sheet of ITD. Also, from penalty notice u/s 271(1)(c) dated 30.12.2016 was issued separately as per assessment order also contain registration number of penalty register for initiation of penalty. Hence, it is concluded that inadvertently the signature is missing on the assessment order but the same is in order and corelate with demand notice, computation and penalty notice issued along with it wherein penalty notice, and demand notice are signed which are considered as part of assessment order.”
Accordingly, the ld. AR argued that it is an admitted fact that the assessment order is passed without signature. The ld. AR further argued that though the CIT(A) has called for the remand report from the AO the CIT(A) did not give any finding with regard to the legal ground and the observations of the AO in the remand report. The ld. AR also argued that the unsigned assessment order cannot be held curable under section 292B of the Act.
The ld. DR on the other hand relied on the order of the lower authorities.
We heard the parties and perused the material on record. The issue of validity of the unsigned assessment is considered by the Hon'ble Supreme Court in the case of Smt. Kilasho Devi Burman vs. CIT [1996] 85 Taxman 346 (SC).
“12. The High Court based itself upon the demand notice and the acknowledgement slip signed by Phool Singh and observed, "Unless an assessment order was passed under or in pursuance of the Act, question of a notice of demand in the prescribed form specifying the sum payable by the assessee, could not arise". The High Court did not give the importance to the fact that upon the record produced by the revenue before the Tribunal there was no signed assessment order nor a signed assessment form.
That an assessment order has to be signed is established by the judgment of this Court in Kalyankumar Ray v. CIT (1991] 191 ITR 634. It said:
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"...If, therefore, the Income-tax Officer first draws up an order assessing the total income and indicating the adjustments to be made, directs the office to compute the tax payable on that basis and then approves of it, either immediately or some time later, no fault can be found with the process, though it is only when both the computation sheets are signed or initialled by the Income-tax Officer that the process described in section 143(3) will be complete.
…All these decisions emphasise that all that is needed is that there must be some writing initialled or signed by the Income-tax Officer before the period of limitation prescribed for completion of the assessment has expired in which the tax payable is determined and not that form usually styled as the 'assessment order should itself contain the computation of tax as well." (pp. 638-640)
A valid assessment upon the HUF for the assessment year 1955-56 was central to the case of the revenue. Since it was unable to establish, by the production of a signed assessment order for that year, that there was such valid assessment, its case fell and the Tribunal was right in so holding. The High Court was in error in concluding that the findings of the Tribunal on the record were perverse.
The appeal is allowed. The judgment and order under appeal is set aside. The judgment and order of the Tribunal is restored.” (emphasis supplied)
Further we notice that the coordinate bench in the case of Reuters Asia Pacific Ltd., vs DCIT (IT) ([2023] 157 Taxmann.com 705 (Mum-Trib)) has considered a similar issue and held that – 6. We have heard the submissions made by rival sides and have examined the impugned assessment order. The assessee in ground No. l of the appeal has challenged the validity of assessment order served on the assessee as the said order does not bear the signature of the Assessing Officer.
The assessment order was served on the assessee through designated E-mail ID of the Assessing Officer. Though the order was generated on 3-2-2021, but the same was communicated to the assessee through E-mail as attachment on 19-2-2021 i.e. almost after two weeks from the date of generation of the order.
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8. The first Notification that has been referred before us is dated 3-2-2016. Ostensibly, this notification was issued by the CBDT when the Department was in the process of migration from manual mode to E-Assessment procedure. To mitigate immediate problem of the Assessing Officers to digitally sign the assessment order before uploading on ITBA portal, the Assessing Officer were allowed to sign the notice u/s 143(2)/143(1) and the assessment order manually and thereafter upload PDF format of the same before the order is served on to the assessee through e-mail in accordance with section 282 of the Act. The relevant extract of the said Notification where the requirement to sign assessment order by Assessing Officer and thereafter serving of the same to the assessee is reproduced herein below:
"6. The procedure, formats and standards for ensuring secured transmission of electronic communication is specified as under:
**
**
**
The A.O shall pass the order and attach the scanned copy of the order u/s. 143(3) bearing his/her signature in PDF format to the email sent to the assessee and/or cause the order u/s.143(3) to be served as specified in section 282 of the Income-tax Act,
1961."
Section 282A of the Act deals with authentication of notices and other documents. The section mandates that where the Act requires the notice or other documents to be issued by any Income-tax Authority, such notice or other document signed and issued in paper form or communicated in electronic form by the Authority in accordance with procedure as may be prescribed. Section 282 of the Act specifies the mode of service of notice or summon or requisitions or order or any other communication under this Act. A conjoint reading of the above two sections would make it clear that other documents referred to u/s. 282A of the Act would include summon or requisition or order or any other communication. Thus, the requirement of section 282A of the Act is that before any notice or order is communicated to the assessee it should be signed in accordance with the prescribed procedure.
The assessee has also placed on record Instruction No. 1/2018, dated 12-2-2018 with respect to conduct of Assessment proceedings in scrutiny cases through 'E- Proceedings'. Therein apart from other procedural aspects, the Board once again specifically mentioned the requirement of digital signatures by the Assessing Officer on orders/notices/communications before they are issued to the assessee.
Next, the assessee has placed on record ITBA Assessment Instruction No. 6 (supra). The said Instruction lists out the entire process of passing the assessment order under 'E-Assessment'. The process is divided in six steps viz.: (a)
Drafting of assessment order;
(b)
Income computation;
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(c)
Tax computation;
(d)
Feed back;
(e)
Order generation; and (f)
Refund or demand.
The assessment process is complete with service of assessment order along with notice of demand, tax computation and notice of penalty, if any. In case of refund, a separate process is initiated through CPC-ITR for adjustment of demand, if any. The stage of Order Generation under the 'E-Assessment' procedure has been explained in the said instructions, the same is reproduced herein below:
"(E) Order Generation:
(i) AO needs to go back to the Enter Assessment order tab for the final step of generation of assessment order. AOs are advised to verify/compare the Assessment of income in the draft text order with the Assessed Income as computed thoroughly to ensure that all items are correctly reflected as per the draft order including the draft computation sheet, before clicking Generate button. Once the verification is done, AO can then select the various documents to be generated with the Assessment order, viz. Demand Notice: Computation sheet; penalty notice, if any. Option to select such documents is available on the order screen. AO can also select the option to digitally sign the order and related documents.
(ii) Once the aforesaid steps are executed, AO can proceed to generate the complete order by clicking on the Generate Order button. On clicking the same, all the data will be sent for final computation (since there may be a gap between the date of draft order and final order). On completion of accounting. AO will get an alert that final data is received. AO then needs go to View/Download Notice/Letter/Order Screen to view the generated orders, computation sheet, demand notice and other documents. In order to digitally sign the assessment order AO will navigate go to View/Enter Dispatch details
Screen to sign the documents digitally. The work item pendency will be closed in ITBA and assessment proceedings will conclude".
As perusal of the stage of order generation as set out in the instructions would show that to sign the assessment order digitally the steps to be followed by Assessing Officer are also meticulously given. The signing of assessment order is an integrated process of order generation in E-Assessment. The assessment proceedings conclude only after the order is digitally signed. Thus, the importance of signing assessment order cannot be undermined.
The Revenue has placed on record an affidavit sworn in by the Assessing Officer who had passed the impugned assessment order. A perusal of the affidavit shows that the Assessing Officer stated on oath that the assessment order was duly signed by him
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Sangita Pramod Harlalka manually on the same date i.e. 3-2-2021 before issuance on the ITBA portal. He has further stated that due to some technical issue the assessment order was not digitally signed while uploading in ITBA portal. During the course of proceedings in the open court, the Id.Counsel for the assessee logged into ITBA portal using his password and ID to show that the assessment order for the impugned assessment year in the case of assessee uploaded on ITBA portal is neither signed manually or digitally by the Assessing Officer. The fact of unsigned assessment order on ITBA portal could not be refuted by the Department. Therefore, the veracity of contents of affidavit placed on record is doubtful. Thus, we have no hesitation in holding that the assessment order served on the assessee and available in the public domain is an unsigned order.
The ld. Departmental Representative has contended that the addition made in the draft assessment order and the final assessment order are same, the draft assessment order has been duly signed by the Assessing Officer, the additions made in the draft assessment order have been upheld by the DRP, therefore, no prejudice is caused to the assessee. The Revenue is shielding unsigned assessment order citing provisions of section 292B of the Act and has contended that service of unsigned order to the assessee is merely a procedural defect that can be rectified. We do not concur with the said proposition advanced on behalf of the Department.
Signing of an assessment order by the Assessing Officer is a mandatory requirement and not merely a procedural formality. Unless, the order is signed it cannot be said to be complete. Once the order is signed digitally or manually, as required, the order is complete and the date of signature on the order shall be the date of passing of the order. Here we would also like to refer to the relevant provisions from the Code of Civil Procedure, 1908 (CPC) explaining the requirement of signing the judgments. Order-XX Rule 3 of CPC mandates that the judgment shall be dated and signed by the Judge at the time of pronouncing it and when once signed, shall not afterwards be altered. The signing of an order is thus, not a mere formality, it is a mandatory requirement. It is not a curable procedural defect that can be fixed by signing the order after service of the same on the assessee. If an unsigned order or notice is served on the assessee, the same is invalid.
The framing of an assessment is a quasi-judicial function. The assessment order passed by the Assessing Officer is subject to judicial scrutiny by higher Appellate Authorities. Therefore, the said order has to be in conformity with the provisions of the Act in every respect, be it limitation, the juri iction of the officer passing the said order or signing and service of the order.
The ld. Departmental Representative referred to the provisions of Rule 127A i.e. the Rule framed in pursuance to the provisions of section 282(2) of the Act for service of notice, summons, requisition order and other communications. The Id. Departmental Representative has pointed that since the assessment order
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Sangita Pramod Harlalka communicated to the assessee originated from the designated E-mail ID of the Assessing Officer, therefore, in terms of rule 127A, the said document shall be deemed to be authenticated. The said argument is desultory and not in unison with the provisions of section 282A of the Act. The relevant provisions of section 282A of the Act are reproduced herein below:
"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"
The aforesaid section is with respect to authentication of notices and other documents i.e. orders/summons/requisitions/communications etc. Sub-section (1) makes it obligatory that where any notice or other document is required to be issued under the provisions of the Act, the same shall be signed and issued by the competent authority in accordance with the procedure prescribed. The section is unambiguous, specifies signing of notice or other documents mandatory and the manner of signing procedural. Therefore, the Board has issued instructions from time to time laying down the procedures inter alia for signing of the notices and the assessment orders.
Sub-section (2) of section 282A of the Act explains the connotation of expression
"authentication". Thus, signing of document and authentication of document carry different meaning. Signing of document denotes committing to the document, whereas, authentication of document relates to genuineness of origin of document. If signing and authentication would mean the same, then there was no need for the Legislature to lay down the requirement of signing the documents viz, notices, orders etc. in sub- section (1) and explain the purpose of authentication in sub-section (2) of section 282A of the Act. If argument of the Revenue is accepted, then the provisions of sub- section (1) to section 282A would become redundant.
Lastly, the Revenue has tried to take shelter under section 292B of the Act. The said section cures the procedural defects or omissions. The section does not grant immunity from non-compliance of statutory provisions. Non signing of an assessment order is not a procedural flaw that can be cured subsequently. The order is complete only when it is signed and released. The date on which the order is signed by the 9 ITA 4167/Mum/2025 Sangita Pramod Harlalka Assessing Officer is the date of order. If Revenue's contention is accepted and the Assessing Officer is allowed to sign the assessment order now considering it to be procedural deficiency, still the order would suffer from the defect of limitation and would be without juri iction.
In the case of Vijay Corporation (supra), the Co-ordinate Bench in a case where the assessment order served on the assessee was not signed by the Assessing Officer, held that requirement of signature of the Assessing Officer is a legal requirement. The omission to sign the order of assessment cannot be cured by relying on the provisions of section 292B of the Act and held the order invalid.
Ergo, in facts of the case and documents on record, we hold the unsigned impugned assessment order served on the assessee invalid and quash the same.
From the perusal of the above judicial pronouncements it is clear that the unsigned assessment is not valid and that the same cannot be cured under section 292B of the Act. As already mentioned, it is an admitted fact in assessee's case that the assessment order is not signed by the AO and therefore the ratio laid down by the Hon'ble Supreme Court and the coordinate bench is applicable to assessee's case also. In view of these discussions we hold that the assessment order dated 28.12.2016 which is not signed by the AO is invalid and liable to be quashed.
Since we have allowed the appeal on the legal ground, the grounds on merits have become academic not warranting any separate adjudication
In result the appeal of the assessee is allowed
Order pronounced in the open court on 28-08-2025. (JUSTICE (RETD.) C.V. BHADANG) (PADMAVATHY S)
President Accountant Member
*SK, Sr. PS
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent
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3. DR, ITAT, Mumbai
4. 5. Guard File
CIT
BY ORDER,
(Dy./Asstt.