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Facts
These are cross appeals filed by the assessee and the revenue against the order of the CIT(A) for assessment year 2016-17. The assessee raised an additional ground challenging the validity of the assessment, contending that the notice issued under section 143(2) was not signed.
Held
The Tribunal held that an unsigned notice issued under section 143(2) is invalid and goes to the root of jurisdiction, making the assessment void ab initio. The Tribunal followed the ratio laid down by the Hon'ble Supreme Court and various High Courts on the mandatory nature of signing notices.
Key Issues
Whether an assessment based on a notice issued under section 143(2) that is neither digitally nor manually signed is valid in law.
Sections Cited
143(2), 142(1), 282A, 292B
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Income Tax Appellate Tribunal, ‘A’ BENCH, BANGALORE
Before: SHRI NARENDER KUMAR CHODHRY & SHRI WASEEM AHMED
PER WASEEM AHMED, ACCOUNTANT MEMBER:
These are cross appeals filed by the assessee and the revenue. The appeals are directed against the order of the learned CIT(A), Bangalore, for the assessment year 2016-17.
First, we take up assessee’s appeal bearing ITA No. 603/Bang/2024.
The assessee, vide letter dated 28.12.2024, has raised additional grounds of appeal challenging the validity of the assessment. The assessee, inter-alia, contends that the notice issued under section 143(2) of the Act was not signed and therefore is invalid in law.
3. We have considered the submission. The additional ground raised goes to the root of the matter. It questions the very validity of the assessment proceedings on the basis of an unsigned statutory notice. The issue is a pure question of law. It does not require fresh investigation of facts because the material notice is already on record.
3.1 The Hon’ble Supreme Court in National Thermal Power Co. Ltd. v. CIT [229 ITR 383] has held that the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below, and having a bearing on the tax liability of the assessee, even though such question was not raised earlier before the lower authorities. Following the ratio laid down by the Hon’ble Supreme Court, we admit the additional ground raised by the assessee. This additional ground is accordingly taken up for adjudication along with the other grounds in the appeal.
3.2 The Authorised Representative for the assessee submitted that the notice issued under section 143(2) of the Act dated 19.07.2017 is not valid. The notice is neither signed manually nor digitally. Therefore, . it is void and without jurisdiction. It was argued that section 282A(1) of the Act requires every notice to be signed by the Income Tax Authority. The assessee placed reliance on Notification No. 2/2016 dated 03.02.2016 dealing with paperless assessment proceedings. This notification requires the Assessing Officer to attach a scanned copy of the notice under section 143(2) or 142(1) of the Act bearing his or her signature in PDF format to the email being sent to the assessee. Reliance was also placed on CBDT Instruction No. 1/2018 dated 12.02.2018 which mandates that all departmental orders and notices through the e-proceedings facility must be digitally signed by the Assessing Officer.
3.3 The assessee relied on several judicial precedents. The Hon’ble Karnataka High Court in Begur Sinnappa Venkatesh v. ITO in WP 20807 of 2023 dated 9-11-2023 held that when the notice is not digitally or manually signed it is invalid. The Hon’ble Allahabad High Court in Vikas Gupta v. UOI 142 448 ITR 1 held that the words “shall be signed” in section 282A are mandatory. The Hon’ble Bombay High Court in Prakash Krishnatvar Bhardwaj v. ITO reported in 451 ITR 27 held that unsigned notices are invalid. The ITAT Mumbai in Reuters Asia Pacific Ltd. v. DCIT reported in 157 taxmann.com 705 also quashed an assessment where the notice was unsigned. The assessee further relied on the decision of the Bangalore Tribunal in Yashoda Electricals v. ACIT in where it was held that section 292B cannot cure a defect if the jurisdictional notice itself is invalid.
On the other hand, the Departmental Representative supported the orders of the Assessing Officer and the ld. CIT(A). It was submitted . that the notice was generated through the ITBA system and contained a Document Identification Number (DIN). According to the Department, the system-generated notice itself was valid and did not require a separate digital or manual signature. It was also argued that section 292B cures such defects, as the assessee was fully aware of the notice and participated in the proceedings. The Department submitted that system authentication through DIN is sufficient compliance in the context of electronic communication.
We have considered the rival contentions of both the parties and perused the materials available on record. The provision of section 282A(1) of the Act requires every notice to be signed by the Income Tax Authority. Notification No. 2/2016 governing paperless assessment proceedings requires that statutory notices including those under section 143(2) of the Act must be attached in PDF format bearing the signature of the Assessing Officer. CBDT Instruction No. 1/2018 also requires that all e-proceeding notices must be digitally signed.
5.1 In the present case, the notice dated 19.07.2017 is neither digitally signed nor manually signed. It does not satisfy the requirement of section 282A(1) of the Act. It also does not comply with Notification No. 2/2016 or CBDT Instruction No. 1/2018. The authorities cited by the assessee directly apply to the facts. The notice issued is therefore invalid.
5.2 We are unable to accept the argument of the Department based on section 292B of the Act. The defect in this case is not procedural or technical. It goes to the root of jurisdiction. An unsigned notice is no . notice in law. The Bangalore Tribunal in Yashoda Electricals v. ACIT has already held that section 292B cannot cure a jurisdictional defect. We respectfully follow the same.
5.3 Accordingly, the notice issued under section 143(2) dated 19.07.2017 is held to be invalid. The assessment made on the basis of such notice is void ab initio. The assessee’s appeal in is allowed. Since the assessment itself is quashed, all other grounds raised by the assessee are infructuous.
5.4 The revenue’s appeal in is directed against relief granted by the ld. CIT(A). However, once the assessment itself is held to be invalid, the revenue’s appeal does not survive. It is accordingly dismissed.
In the result, the assessee’s appeal is allowed whereas the revenue’s appeal is dismissed.