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Facts
The assessee filed a return of income declaring nil income. The original assessment was framed under Section 143(3). Later, the case was reopened under Section 147 by issuing a notice under Section 148. The reopening was based on information about an alleged bank account where the assessee received funds as share capital. The addition was made treating the funds as unexplained income under Section 68.
Held
The Tribunal held that the notice issued under Section 148 for reopening the assessment was unsigned, rendering it invalid and void ab initio. Furthermore, the reopening was done after the expiry of four years from the end of the assessment year without establishing any failure on the part of the assessee to disclose material facts, which is a condition for reopening after four years as per the proviso to Section 147.
Key Issues
Whether the reassessment proceedings initiated by an unsigned notice under Section 148 are valid? Whether the reassessment initiated after four years from the end of the assessment year is valid without establishing failure of the assessee to disclose material facts?
Sections Cited
147, 148, 143(3), 68, 143(2), 142(1), 40A(3), 148A(b)
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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRIPRADIP KUMAR CHOUBEY, JM
These are appeals preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] even dated 05.02.2025 for the AY 2013-14 & 2014- 15.
708/KOL/2025 for A.Y. 2013-14 2. The issue raised in ground no.1 is against the order of ld. CIT (A) upholding the reassessment proceedings-initiated u/s 147 of the Act despite the fact that the notice issued u/s 148 of the Act was unsigned and therefore, the same is invalid and void ab initio.
Blank 2.3. It is apparent from the above that the notice issued u/s 148 of the Act has not been signed by the ld. AO either digitally or manually and therefore, the unsigned notice is bad in law. The case of the assessee squarely covered by the decision of Hon'ble Bombay High Court in case of Prakash Krishnavtar Bhardwaj vs. Income-tax Officer [2023] 451 ITR 27 (Bombay)[09-01-2023], wherein it has held as under:-
21. We are, therefore, of the considered opinion that in the present case, the notice u/s.148 dated 2-4-2022 having no signature affixed on it, digitally or manually, the same is invalid and would not vest the Assessing Officer with any further jurisdiction to “8. In the instant case, it is an undisputed fact that the Notice at Annexure - A dated 21-3-2022 is not signed either physically or digitally but the impugned notice also prescribes a period of six days, which is lesser than the minimum prescribed period of seven days as contemplated under section 148A(b) of the IT Act. Under these circumstances, in the light of the judgment of this Court in Begur's case and the judgment of the Bombay High Court in Mukesh's case supra, I am of the considered opinion that the impugned notice at Annexure - A and also consequential proceedings, orders, notices, etc., deserves to be quashed by reserving liberty in favour of the respondents to take recourse to such remedies as available in law.
2.5. Similarly, the Hon'ble Jurisdictional High Court in case of CIT Vs. Aparna Agency (P.) Ltd. reported in [2004] 139 TAXMAN 132 (CAL.), wherein it has held as under:-
“9. The service of a valid notice, as already noticed, is a condition precedent to the assumption of jurisdiction by the Assessing Officer. The existence of a valid notice is, therefore, a jurisdictional fact. The question, therefore, is not to be looked at from the perspective that the decision to issue notice was by an authority competent in that behalf under the Act and, therefore, submitting to his jurisdiction without objection, the inference of waiver arises. The question being one of jurisdiction, to be more specific the condition precedent to the assumption of jurisdiction what has to be seen is that the person that purported to exercise the jurisdiction vested in him had in fact exercised that jurisdiction and signed the said notice. The said test has not been
At the time of hearing the assessee pressed ground no.2, which is extracted as under:-
2. The ld. CIT (A) ignored the fact that the reassessment proceedings were initiated after the expiry of 4 years from the end of the assessment year without establishing any failure on the part of the appellant to disclose material facts.
3.1. The facts of the case have been discussed supra. In the appellate proceedings, the ld. CIT (A) confirmed the reopening of addition made by the ld. AO.
3.2. After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessment u/s 143(3) of the Act was framed vide order dated 30.09.2015. The reopening of assessment was made u/s 147 of the Act by issuing notice on 20.03.2020, which is apparently after a period of four years from the end of the relevant assessment year. Therefore, the reopening of assessment can only be made subject to the satisfaction of conditions as envisaged in Proviso to Section 147 of the Act. The proviso envisages that the reopening of assessment u/s 147 of the Act , where the assessment has been framed u/s 143(3) of the Act ,can only be made after a lapse of four years from the end of the “17. The statute is a fiscal statute. It is to be interpreted strictly. When a particular action has to be taken in a particular manner, the same has to be taken in that manner and not otherwise. When the proviso provides that it can be reopened only if there is a failure to disclose truly and fully all materials, then it is only on such failure, it can be reopened. But, there is nothing recorded in the order showing the satisfaction of the Joint Commissioner or the Assessing Officer that there was a failure on the part of the assessee as above. Simple escapement of notice will not confer jurisdiction to reopen the assessment, four years after the end of the assessment year.
709/KOL/2025 for A.Y. 2014-15 4. The issue raised in this appeal is similar to one as decided by us in A.Y. 2013-14. Accordingly, our decision would, mutatis mutandis, apply to this appeal of assessee in ITA No. 709/KOL/2025. Hence, the appeal of assessee in is allowed.
In the result, the both the appeals of the assessee are allowed.
Order pronounced in the open court on 14.01.2026.