9911796707
TMI Blog2012 (4) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows: "1. On the facts and circumstances of the case and in law the CIT (Commissioner of Income Tax) (A) erred in holding that the Assessment Order passed u/s. 143(3) dated 10.12.2007 was a valid order inspite of the same had not been signed by the assessing officer." 2. The assessee is a partnership firm engaged in the business of investment in shares, finance, commission etc. The assessee filed the return on income for A.Y 2005-06 on 30/10/2005. An order of assessment dated 10/12/2007 was passed by the AO. In the said order the AO determined the total income as follows: [I] Business Income - As per assessee's statement 2,77,014 Add : Interest disallowed as in para 4 above 10,66,622 Expenses estimated on earning Dividend income 30,000 TDS on Society charges amounting To Rs. 1225/- was not paid in time 1,225 13,74,861 The assessee filed appeal before CIT(A) challenging aforesaid additions. Before CIT(A) the assessee raised a ground that the order of assessment is not valid in law for the reason that the AO did not sign the same. On this objection the CIT(A) called fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the plea of the assessee holding as follows: "2.4 I have considered the rival contentions. As mentioned by the Assessing Officer in his report, the Supreme Court judgement in Kalyankumar Ray v. CIT has held that the statute does not require the service of the assessment order and contemplates only the service of a notice of demand. It is not disputed that the notice of demand or for that matter computation in ITNS 150 was not signed or served on the appellant. 'Assessment' is one integrated process invoking not only the assessment of total income but also the determination of tax. The net sum payable and the demand notice issued are in accordance with the assessment made by the Assessing Officer. Since the tax has been determined and demand notice issued and served if the assessment order remained to be unsigned it is merely a procedural irregularity curable under the provisions of section 292B. It is the service of demand notice which is crucial; such failure would invalidate proceedings as held in Mohan Wahi Ors v. CIT 248 ITR 799. Conversely where there is proper service of demand notice, as in the case in the present appeal the assessment cannot be held invalid. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive any notice on his behalf. There was no material to show that the demand raised in the demand notice had been paid by the assessee. The assessee filed a partition suit. For the assessment years 1956-57 to 1961-62, no notices were issued to the Hindu undivided family. The income from the properties which were covered by the partition suit was returned by, and assessed in the hands of the erstwhile members of the Hindu undivided family. The Income-tax Officer thereafter took proceedings under section 147(a) of the Income-tax Act, 1961, and concluded that the assessee's Hindu undivided family had escaped assessment. The Tribunal went into the question as to whether there was an assessment on the Hindu undivided family for the assessment year 1955-56. Its conclusions were: (i) that there was no signed assessment order; (ii) that even if a demand notice was taken to exist in this case, the assessment was invalid as, in spite of there being a positive demand thereunder, it had not been served on the assessee; (iii) that if there was no assessment on the Hindu undivided family (for 1955-56), there was no need on the part of the assessee to come forward with an application under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment is not fatal. We find that the Hon'ble Supreme Court in the case of Smt. Kilasho Devi Burman ( supra ) had considered its decision in the case of Kalyankumar Ray ( supra ) and has observed as follows: "The High Court based itself upon the demand notice and the acknowledgment slip signed by Phool Singh and observed, "Unless an assessment order was passed under or in pursuance of the Act question of a notice of demand in the prescribed form specifying the sum payable by the assessee could not arise". The High Court did not give due importance to the fact that upon the record produced by the Revenue before the Tribunal there was no signed assessment order nor a signed assessment form. That an assessment order has to be signed is established by the judgment of this court in Kalyankumar Ray v. CIT [1991] 191 ITR 634. It said (page 638) : "If, therefore, the Income-tax Officer 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. Provisions of Sec.143(3) of the Act contemplates that the AO shall pass an order of assessment in writing. The requirement of signature of the AO is therefore a legal requirement. The omission to sign the order of assessment cannot be explained by relying on the provisions of Sec.292B of the Act. Tax computation is a ministerial act as observed by the Hon'ble Supreme Court in the case of Kalyankumar Ray ( supra ) and can be done by the office of the AO if there are indications given in the order of assessment. But the notice of demand signed by the office of the AO without the existence of a duly signed order of assessment by the AO, in our view cannot be said to be a omission which was sought to be covered by the provisions of Sec.292B of the Act. If such a course is permitted to be followed than that would amount to delegation of powers conferred on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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