2016 (8) TMI 652 - AT - Income Tax

Penalty under section 271(1)(c) - unsigned penalty order - Held that - Undisputedly, on verification of the original penalty order under section 271(1)(c) communicated to the assessee, which was produced for verification of the Bench, it is noticed that though it bears the official seal of the Assessing Officer but there is no signature of the Assessing Officer on the body of the order. The assessee has also filed an affidavit clearly and categorically stating therein that the unsigned penalty order is the only order received by him from the Assessing Officer. The claim of the assessee appears to be correct considering the fact that the assessee on more than one occasion has requested the Assessing Officer to supply a signed copy of the penalty order. When the assessee has repeatedly requested the Assessing Officer to supply a signed copy of the penalty order, we see no reason why the Assessing Officer should be adamant and stubborn in his attitude in communicating a signed copy of the penalty order. In fact, the Department has failed to conclusively prove the fact that the penalty order communicated to the assessee was signed by the Assessing Officer, whereas the assessee not only has produced the original unsigned penalty order received from the Assessing Officer but also filed an affidavit in support of such claim. In our view, in the absence of any contrary evidence brought to our notice, we are inclined to accept the assessee s version that the penalty order received by him from the office of the Assessing Officer does not bear the signature of the Assessing Officer. Therefore, in our opinion, an unsigned order has no legal sanctity, hence, invalid in law. Penalty imposed under section 271(1)(c) deleted - Decided in favour of assessee.

Summary

Issues:
Imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2008-09 based on an unsigned penalty order.

Analysis:
The appeal before the Appellate Tribunal ITAT Mumbai was against the imposition of a penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2008-09. The Assessing Officer disallowed interest expenditure claimed by the assessee and initiated penalty proceedings alleging inaccurate particulars of income. The penalty order communicated to the assessee was unsigned, leading to a challenge by the assessee. The learned Commissioner (Appeals) upheld the penalty order, stating that the signed copy was available in the Assessing Officer's record. However, the Tribunal noted that the unsigned penalty order was the only one received by the assessee, despite repeated requests for a signed copy. The Tribunal emphasized that an unsigned order lacks legal sanctity and referred to a precedent highlighting the importance of a signed order for validity. Consequently, the Tribunal set aside the penalty imposed under section 271(1)(c) of the Act.

The Tribunal found that the unsigned penalty order received by the assessee was the only one in possession, despite requests for a signed copy. The Tribunal emphasized the legal requirement for orders to be signed for validity, citing a precedent where the absence of a signed order rendered the assessment invalid. The Tribunal rejected the contention that the provisions of section 292B could save the penalty order, emphasizing the necessity of the Assessing Officer's signature. Consequently, the Tribunal concluded that the unsigned penalty order lacked legal sanctity, leading to the deletion of the penalty imposed under section 271(1)(c) of the Act.

In conclusion, the Appellate Tribunal ITAT Mumbai ruled in favor of the assessee, setting aside the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2008-09. The Tribunal emphasized the importance of a signed order for validity, highlighting that an unsigned order lacks legal sanctity. The decision was based on the fact that the penalty order communicated to the assessee was unsigned, despite repeated requests for a signed copy, rendering it invalid in law.