2024 (3) TMI 526 - AT - Income Tax

Validity of reopening notice - Absence of the manual/digital signature of the A.O in the copy of the Reopening notice - contention of the AR that as the notice issued by the A.O u/s. 148 does not bear digital signature or manual signature of the AO, therefore, the same, being violative of Section 282A(1) is non-est in the eyes of law - HELD THAT - The absence of the signature affixed on the notice, digitally or manually, therein, rendered the same as invalid and divested the A.O of any further jurisdiction to proceed and assess the income of the assessee. My aforesaid conviction is fortified by the judgement of Prakash Krishnavtar Bhardwaj 2023 (1) TMI 428 - BOMBAY HIGH COURT wherein involving identical facts, observed that as the notice u/s. 148 as was there before them did not have the signature affixed on it digitally or manually, the same was invalid and would not vest the A.O with any further jurisdiction to proceed to reassess the income of the assessee. Also in the case of Vikas Gupta and others Vs. UOI ( 2022 (9) TMI 478 - ALLAHABAD HIGH COURT held that the expression shall be signed used in Section 282A(1) makes the signing of the notice or other document by that authority a mandatory requirement. Signing of the notice was not a ministerial act or an empty formality which can be dispensed with. Elaborating on the term signed , it was observed that that same was to be construed as giving one's name to signify assent or adhesion to by signing one's name; to attest by signing or when a person is unable to write his name then affixation of mark by such person. Thus absence of affixation of signature of the A.O, manually or digitally on the notice u/s. 148 which is discernible from the assessment records and had not been rebutted by the Ld. DR, very basis for assumption of jurisdiction by the A.O for framing of assessment vide his order u/s. 144 r.w.s. 147 falls to ground. Decided in favour of assessee.

Summary

Issues Involved:
1. Ex-parte dismissal of the appeal by the CIT(A).
2. Validity of initiation of re-assessment proceedings under Section 147 of the Income-tax Act, 1961.
3. Justification for confirming cash deposits as unexplained money.
4. Justification for confirming addition of undisclosed interest income.
5. Justification for confirming addition of undisclosed salary income.
6. Validity of the impugned order on legal and factual grounds.
7. Right to amend grounds of appeal.

Summary:

1. Ex-parte Dismissal of the Appeal by the CIT(A):
The assessee argued that the CIT(A) dismissed the appeal ex-parte without considering the request for supply of documents necessary for preparing submissions. Despite visiting the A.O's office multiple times, the documents were not provided, causing hardship in presenting the case.

2. Validity of Initiation of Re-assessment Proceedings under Section 147:
The A.O initiated proceedings under Section 147 based on information that the assessee made cash deposits of Rs. 11 lacs and earned salary income of Rs. 5,10,222/- but failed to file a return. The assessee contended that the A.O did not have a valid reason to believe that income had escaped assessment. However, the Tribunal found that the A.O had sufficient material to form a belief that income had escaped assessment, thus justifying the initiation of proceedings under Section 147.

3. Justification for Confirming Cash Deposits as Unexplained Money:
The CIT(A) confirmed the addition of Rs. 11,00,000/- as unexplained money, rejecting the assessee's claim that the deposits were made from her husband's proprietary concern. The Tribunal upheld this decision, noting the absence of supporting evidence for the claim.

4. Justification for Confirming Addition of Undisclosed Interest Income:
The CIT(A) confirmed the addition of Rs. 4,393/- as undisclosed interest income. The Tribunal did not specifically address this issue, as the primary focus was on the procedural validity of the assessment.

5. Justification for Confirming Addition of Undisclosed Salary Income:
The CIT(A) confirmed the addition of Rs. 5,10,222/- as undisclosed salary income, ignoring deductions under Chapter VI-A and TDS. The Tribunal upheld this decision, noting the lack of a return of income filed by the assessee.

6. Validity of the Impugned Order on Legal and Factual Grounds:
The Tribunal found that the notice issued under Section 148 was neither digitally nor manually signed, rendering it invalid and divesting the A.O of jurisdiction to proceed with the assessment. This procedural defect led to the quashing of the assessment order.

7. Right to Amend Grounds of Appeal:
The appellant reserved the right to amend the grounds of appeal in the interest of justice.

Conclusion:
The Tribunal quashed the assessment order due to the invalidity of the notice under Section 148, which was not signed either digitally or manually. Consequently, the appeal was allowed on procedural grounds without addressing the merits of the case.