MAHANKALI JYOTHI,DUBLIN, USA vs. INCOME TAX OFFICER, INTERNATIONAL TAXATION WARD, VIJAYAWADA
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
Per contra, the Ld. Departmental Representative [“Ld. DR”] submitted that the assessee has participated in the assessment proceedings before the Ld. AO and has not contested the issue of unsigned notice before the lower authorities. The Ld. DR also referred to the e-mail received from the Income Tax Officer, Ward- International Taxation, Vijayawada stating that when the PAN was migrated to the Income Tax Officer, Ward-2, Ongole on 20/08/2018 and thereafter the Income Tax Officer, Ward-2, Ongole manually signed the notice U/s. 143(2) and served the same on 20/09/2018. He therefore pleaded that the order of the Ld. Revenue Authorities be upheld.
We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. It is an undisputed fact that the notice U/s. 143(2) was originally issued by the Income Tax Officer, Ward-1(3), Vijayawada vide DIN No. ITBA/AST/S/143(2)/2018-
8 19/1011595547(1), dated 17/08/2018 which remained unsigned. Later on, the same notice was manually signed by the Income Tax Officer, Ward-2, Ongole and the Revenue has produced an acknowledgement slip stating that it has been delivered to the assessee on 20/09/2018. However, the Ld. Revenue Authorities could not identify the person who had received the notice on behalf of the assessee. Later on, the file was migrated to the Income Tax Officer, Ward-International Taxation, Vijayawada who passed the assessment order dated 10/12/2019. The main contention of the Ld. AR is that since the original notice remained unsigned and subsequently manually signed and delivered after the date of hearing, it cannot be considered as a valid notice and hence the proceedings subsequent to that notice remains non-est in the eyes of law. In the case law relied on by the Ld. AR in the case of Prakash Krishnavtar Bhardwaj vs. Income Tax Officer & Ors (supra), the Hon’ble Bombay High Court in para 21 of their order held as follows:
“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 proceed to reassess the income of the petitioner. Consequently, the notice dated 2-4-2022 u/s.148 of the Act issued to the petitioner being invalid and sought to be issued after three years from the end of the relevant assessment year 2015-16 with which we are concerned in this petition, any steps taken by the respondents in furtherance of notice dated 21-3-2022 issued under
9 clause (b) of section 148A of the Act and order dated 2-4-2022 issued under clause (d) of section 148A of the Act, would be without jurisdiction, and therefore, arbitrary and contrary to Article 14 of the Constitution of India. Consequently, we quash and set aside the notice dated 2-4-2022 issued by the respondents u/s.148 of the Act, order dated 2-4-2022 under clause (b) of section 148A of the Act and notice dated 21-3-2022 issued under clause (b) of section 148A of the Act.”
Further, as argued by the Ld. DR, the unsigned notice is not a technical error in nature and cannot be considered as curable under the provisions of section 292B of the Act. On this issue, the Hon’ble High Court of Madhya Pradesh in the case of Umashankar Mishra vs. CIT [1982] 11 Taxman 75 (MP) has taken a similar view which reads as under: “4. The first question for consideration is whether the Tribunal was right in holding that the notice issued to the assessee under section 271(1)(a) of the Act was a valid notice. Now, the Tribunal has found that that notice was not signed by the ITO. Section 282 of the Act provides that a notice under the Act may be served on the person named therein as if it were a summons issued by a court under the Code of Civil Procedure, 1908. Sub- rule (3) of Rule 1 of O.5, CPC, provides that every summons shall be signed by the judge or such officer, as he appoints. In view of this provision, it must be held that the notice to show cause why penalty should hot be levied issued by the ITO should have been signed by the ITO and the omission to do so invalidated the notice. In B.K. Gooyee v. CIT [1966] 62 ITR 109 (Cal), the question for consideration was whether the absence of the signature of the ITO on the notice under section 34 of the Indian I.T. Act, 1922, was a mere irregularity or a clerical mistake. Dealing with this question, Datta J. Observed as follows (p.119): "In the present case, there was more than a mere irregularity or a clerical mistake, for, in my view, a notice without the signature lacks an essential and/or an integral and/or an inseparable vital part or requirement of a notice under section 34, a notice the terms of which are a condition precedent to the assumption of jurisdiction by the Income-tax Officer. It is notice with a body but without a soul. Hence, it is an invalid notice and consequently, equivalent to no notice." 5. We respectfully agree with the aforesaid observations. The Tribunal distinguished the decision in [1966] 62 ITR 109 on the ground that the provisions of section 292B of the Act were introduced after that decision. But, that provision, in our opinion, is intended to ensure that an
10 inconsequential technicality does not defeat justice. But, the signing of a notice under section 271(1)(a) of the Act is not merely an inconsequential technicality. It is a requirement of the provisions of O.5, rule 1(3) of the CPC, which are applicable by virtue of section 282 of the Act. Under the circumstances, the provisions of section 292B of the Act would not be attracted in the instant case and the Tribunal in our opinion, was not right in holding that the notice issued under section 271(1)(a) of the Act was a valid notice in the eye of law. 6. In view of our answer to the first question, our answer to the second question is that the Tribunal was not right in holding that the absence of the signature on the notice simply constituted a mistake or omission within the meaning of section 292B of the Act. 7. In view of the fact that no valid notice was served on the assessee before levying penalty, our answer to the third question is that, on the facts and in the circumstances of the case, the penalty levied under section 271(1)(a) of the Act was not valid. Thus, our answers to all the three questions referred to this court are in the negative and in favour of the assessee.”
Respectfully following the above judicial pronouncements, we are of the considered view that the notice issued by the Ld. AO without signature cannot be construed as a valid notice and hence subsequent proceedings is not valid in the eyes of law and deserves to be quashed. We therefore allow the additional ground raised by the assessee.
Since the core issue involved in the additional ground is decided in favour of the assessee, the original grounds of appeal raised by the assessee need no separate adjudication as it is a mere academic exercise.
In the result, appeal of the assessee is allowed.
11 Pronounced in the open Court on 24th July, 2024.
Sd/- Sd/- (दुव्िूरु आर.एल रेड्डी) (एस बालाकृष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याययकसदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER Dated :24.07.2024 OKK - SPS
आदेश की प्रतितिति अग्रेतिि /Copy of the order forwarded to:- निर्धाररती/ The Assessee – Mahankali Jyothi, 4711, Valley Vista 1. Drive, Dublin, California94568, USA. रधजस्व/The Revenue – Income Tax Officer (International Taxation 2. Ward) O/o. ITO, CR Building, 1st Floor Annex, MG Road, Vijayawada, Andhra Pradesh-520002. 3. The Principal Commissioner of Income Tax, आयकर आयुक्त (अपील)/ The Commissioner of Income Tax 4. ववभधगीय प्रनतनिधर्, आयकर अपीलीय अधर्करण, ववशधखधपटणम/ DR, ITAT, 5. Visakhapatnam गधर्ा फ़धईल / Guard file 6. आदेशधिुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam
