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2024 (9) TMI 1730 - AT - Income TaxValidity of the assessment order not passed within the limitation period prescribed u/s. 153 - Value of unsigned order - date of assessment order framed u/s. 143(3) r.w.s. 144B - HELD THAT - When the assessment order was made on 28/09/2021 as claimed by the AO and DR the same was not signed. In our considered opinion the unsigned order has no value. The notings by the AO also show that due to certain technical glitches the case has been stuck in CPC due to computation failure. The report also shows that multiple complaints were raised on the ITBA helpdesk. Even the screen shot annexed to the report show that till 30/09/2021 the case is still appearing in the work list of FAO. These evidences on record go on to show that the assessment order was not digitally signed till 01/10/2021 and the assessment order made on 28/09/2021 was unsigned. Hon ble Supreme Court in the case of Kalyankumar Ray 1991 (8) TMI 291 - SUPREME COURT has held that there must be some writing initialled or signed by the I.T.O. before the period of limitation prescribed for completion of the assessment has expired in which the tax payable is determined and not that the form usually styled the assessment order should itself contain the computation of tax as well. The signing of the assessment order is an integral part of order generation in e-assessment and the assessment proceedings conclude only after the order is digitally signed therefore signing of the assessment order should not be brushed aside lightly. Therefore the signing of the assessment order is a mandatory requirement and not a procedural formality unless the order is signed assessment does not complete. As per the Faceless Assessment Scheme 2019 which was substituted for e-assessment by Notification No. S.O. 2745(E) dated 13/08/2020 w.e.f. 13/08/2020 as per Clause xiv the assessment unit shall after taking into account all the relevant material available on the record make in writing a draft assessment order and then as per Clause xvi the National e-Assessment Centre shall examine the draft assessment order and finalise the assessment within the period of limitation. In the instant case the assessment order finalized by NFAC is dated 01/10/2021 which is obviously beyond the period of limitation. No hesitation to hold that the impugned assessment order dated 28/09/2021 was not made till 30/09/2021 and it was not digitally signed and was an incomplete assessment order which was completed on 01/10/2021 and hence barred by limitation.
The core legal questions considered by the Tribunal in this judgment primarily revolve around the validity and limitation of the assessment order under the Income Tax Act, 1961, specifically:
1. Whether the assessment order dated 28/09/2021 was validly passed within the limitation period prescribed under Section 153 of the Act, despite the digital signature being affixed on 01/10/2021. 2. The legal significance of the digital signature on the assessment order and whether an unsigned assessment order holds any validity. 3. The applicability and interpretation of judicial precedents concerning the timing and validity of assessment orders, especially in the context of faceless assessment schemes. 4. The procedural requirements under the Faceless Assessment Scheme, 2019, and the impact of technical glitches on the limitation period for passing assessment orders. Issue-wise Detailed Analysis: Validity and Limitation of the Assessment Order (Section 153 of the Act): The fundamental issue was whether the assessment order dated 28/09/2021 was passed within the limitation period, given that the digital signature was affixed only on 01/10/2021. The assessee contended that the order was barred by limitation as the final signed order was dated beyond the prescribed period. The Revenue argued that the order was completed on 28/09/2021 and that the delay in affixing the digital signature was due to technical glitches, which should not invalidate the order. The Tribunal examined the report submitted by the Assessing Officer (AO), which detailed multiple complaints lodged with the ITBA helpdesk regarding technical issues delaying the digital signature process. The AO provided digital footprints from the ITBA system, including screenshots and email communications, to demonstrate that the assessment order was finalized and generated on 28/09/2021. These evidences included:
Despite these submissions, the Tribunal noted that the assessment order and the tax computation sheet were digitally signed only on 01/10/2021. The Tribunal emphasized that an unsigned order has no legal value. The notings of 30/09/2021 confirmed that the case was still pending due to computation failures, and the order was still in the AO's worklist. This indicated that the assessment order was incomplete and unsigned as of the last day of limitation. Legal Framework and Precedents on Signing and Completion of Assessment Orders: The Tribunal relied heavily on the Supreme Court's decision in Kalyankumar Ray vs. Commissioner of Income Tax, which clarified that for an assessment order to be valid, there must be some writing initialled or signed by the Income Tax Officer (ITO) within the limitation period, determining the tax payable. The Court held that the assessment process is complete only when both the assessment order and the computation of tax are signed or initialled by the ITO. It was emphasized that the statute does not prescribe a specific form or require that the computation be on the same sheet as the assessment order, but the signature is mandatory. The Tribunal also referred to the Supreme Court's ruling in Smt. Kilasho Devi Burman vs. Commissioner of Income Tax, which reiterated the necessity of a signed assessment order for validity. The Court held that an assessment order without a signature is invalid and cannot be considered a valid assessment. The Tribunal further noted that the Revenue's reliance on the Faceless Assessment Scheme's new procedures and the generation of a Document Identification Number (DIN) on 28/09/2021 did not override the requirement of a signed order within the limitation period. The Delhi High Court's ruling in Suman Jeet Agarwal vs. Income Tax Officer was cited to clarify that generation of a notice with a DIN does not conclusively prove that the notice or order was irrevocably issued within the limitation period. Interpretation of Faceless Assessment Scheme Procedures: The Faceless Assessment Scheme, 2019, requires the Assessment Unit to draft an assessment order, which is then examined and finalized by the National e-Assessment Centre (NeAC). The Tribunal observed that the assessment order finalized by NeAC was dated 01/10/2021, beyond the limitation period. The AO's report and digital evidence showed that while the AO completed his part on 28/09/2021, the finalization and digital signing by NeAC occurred later, which is critical under the Scheme's procedural requirements. Application of Law to Facts and Treatment of Competing Arguments: The Tribunal carefully weighed the AO's evidence of technical glitches and the digital footprints against the legal requirement of a signed order within the limitation period. While acknowledging the AO's efforts and the technical difficulties faced, the Tribunal held that the law mandates the completion of the assessment by signing the order within the prescribed time. The unsigned order dated 28/09/2021 was held to be incomplete and ineffective. The Revenue's argument that the order was effectively passed on 28/09/2021 due to the generation of DIN and system entries was rejected based on judicial precedents and the factual matrix demonstrating the order remained unsigned and pending. Conclusions: The Tribunal concluded that the assessment order was not validly passed within the limitation period prescribed under Section 153 of the Income Tax Act, 1961, as it was digitally signed only on 01/10/2021, beyond the cutoff date. The Tribunal emphasized that signing is an integral and mandatory step in the e-assessment process and cannot be treated as a mere formality. Consequently, the assessment order dated 28/09/2021 was barred by limitation and hence invalid. Significant Holdings: "The signing of the assessment order is an integral part of order generation in e-assessment and the assessment proceedings conclude only after the order is digitally signed, therefore, signing of the assessment order should not be brushed aside lightly. Therefore, the signing of the assessment order is a mandatory requirement and not a procedural formality unless the order is signed assessment does not complete." "An unsigned order has no value. The notings dated 30/09/2021 by the Assessing Officer also show that due to certain technical glitches, the case has been stuck in CPC due to computation failure. These evidences on record go on to show that the assessment order was not digitally signed till 01/10/2021 and the assessment order made on 28/09/2021 was unsigned." "The statute does not, however, require that both the computations (i.e. of the total income as well as of the sum payable) should be done on the same sheet of paper, the sheet that is super scribed 'assessment order'. It does not prescribe any form of the purpose. It will be appreciated that once the assessment of the total income is complete with indications of the deductions, rebates, reliefs and adjustments available to the assessee, the calculation of the net tax payable is a process which is mostly arithmetical but generally time consuming. If, therefore, the I.T.O. first draws up an order assessing the total income and indicating the adjustments to be made, directs the office to compute the tax payable on that basis and then approves of it, either immediately or some time later, no fault can be found with the process, though it is only when both the computation sheets are signed or initialled by the I.T.O. that the process described in Section 143(3) will be complete." "Generation of a Notice with DIN on ITBA Screen does not conclusively indicate that the Notice has been irrevocably issued." "The assessment order finalized by NFAC is dated 01/10/2021 which is obviously beyond the period of limitation." "The assessment order dated 28/09/2021 was not made till 30/09/2021 and it was not digitally signed and was an incomplete assessment order which was completed on 01/10/2021 and hence, barred by limitation." Accordingly, the Tribunal allowed the appeal of the assessee and dismissed the revenue's appeal, holding the assessment order as barred by limitation and invalid.
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