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TMI Blog2022 (9) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... ers passed under Section 147/148 of the Act, 1961. 3. Since common questions of law on similar set of facts are involved in this batch of writ petitions, therefore, with the consent of learned counsels for the parties, the Writ Tax No.554 of 2022 have been heard as a leading writ petition and facts of this case are being noted. 4. In the above noted writ petitions, the following reliefs have been sought by the petitioners: "WRIT TAX No. 554/22 (I) Issue a writ, or direction in the nature of Certiorari quashing the impugned notice u/s 148 of the Act, dated 31.03.2021, issued by respondent no.3, for A.Y. 2013-14. (Annexure No. 4). (ii) Issue a writ, order or direction in the nature of Prohibition thereby restraining Respondent No. 3 from undertaking further reassessment proceedings pending before him against the Petitioner, for A.Y. 2013-14 in pursuance of notice u/s 148 of the Act, dated 31.03.2021. (iii) Issue any other writ order or direction which this Hon'ble Court may deem fit and proper in the circumstances of the case. (iv) Award the costs of the petition to the petitioner. (v) Issue a Writ, Order or Direction in the nature of Certiorari to quash the Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no. 3 u/s 274 read with Section 271(1)(c) of the Income Tax Act, 1961 to the petitioner (Annexure-22 to the writ petition). WRIT TAX No. - 427 of 2022 (a) Issue a writ, order or direction in the nature of Certiorari quashing the notice dated 16.02.2022 (Annexure-1 to the writ petition) issued by the Respondent No. 1 disposing of the objections raised by the petitioner against the issuance of notice dated 31.03.2021 under Section 148 of the Income Tax Act for the Assessment Year 2014-15; (b) Issue a writ, order or direction in the nature of Certiorari quashing the notice dated 25.11.2021 (Annexure-3 to the writ petition) issued by the Income Tax Department under Section 143(2) read with Section 147 of the Income Tax Act, 1961; (c) Issue a writ, order or direction in the nature of Certiorari quashing the notice dated 31.03.2021 (served on 01.04.2021) (Annexure-2 to the writ petition) issued by the Income Tax Officer, Ward-2(3) (1), Kanpur Nagar under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2014-15; (d) Issue a writ, order or direction in the nature of Mandamus restraining the respondents from proceeding with the consequential reassessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment Order dated 31.03.2022 passed by Respondent No.4 (Annexure 11) being in consequence of the proceedings which is without jurisdiction and without giving an effective opportunity of being heard. (vi) Issue writ order or direction in nature of mandamus directing Respondent Nos.3 & 4 not to proceed further towards the recovery of demand created in consequence of the assessment order dated 31.03.2022 (Annexure -11)/ not treat the Petitioner as assessee in default, during the the present writ petition. WRIT TAX No. - 642 of 2022 A. issue a writ, order or direction in the nature of certiorari quashing the impugned notice issued under section 148 of income tax act dt. 31.03.2021 and order disposing off objections dt. 26.03.2022, as also the sanction authorising the issuance of such notice for a.y. 2013-14. B Issue a writ, order or direction in the nature of certiorari quashing the impugned order of reassessment dt. 30.03.2022 which is made contrary to settled principles of law and in violation to the settled principles of natural justice. WRIT TAX No. - 694 of 2022 1. issue a writ, order or direction in the nature of certiorari quashing the impugned notice issued under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time no notice shall be issued by the Assessing Officer after expiry of four years from the end of the Assessment Year unless the Principal Chief Commissioner/ PCIT is satisfied on the reasons recorded by the Assessing Officer that it is a fit case for issuing such notice. 7. In Writ Tax No. 370 of 2022 the impugned notice under section 148 of the Act, 1961 relating to the assessment year 2015-16 was issued on 31.3.2021 at 6.33 p.m. whereas the satisfaction under section 151 was recorded by the PCIT subsequently at 7.15 p.m. on the same day. In Writ Tax No. 427 of 2022 the impugned notice under section 148 of the Act, 1961 relating to the assessment year 2014-15 was issued on 31.3.2021 at 3.32 p.m. whereas the satisfaction under section 151 was recorded by the PCIT subsequently at 4.02 p.m. on the same day. In Writ Tax No. 475 of 2022 the impugned notice under section 148 of the Act, 1961 relating to the assessment year 2014-15 was issued on 31.3.2021 at 3.34 p.m. whereas the satisfaction under section 151 was recorded by the PCIT subsequently at 4.02 p.m. on the same day. In Writ Tax No. 487 of 2022 the impugned notice under section 148 of the Act, 1961 relating to the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d satisfaction of the PCIT stands validated in view of Section 282A of the Act, 1961 inasmuch as the digital or physical unsigned satisfaction recorded by the PCIT shall be deemed to be authenticated under Section 282A of the Act, 1961 read with Rule 127A of the Income Tax Rules, 1962 and Sections 2(d), 2(p) and 2(t) of the Information Technology Act, 2000 inasmuch as satisfaction bears the name and office of a designated income tax authority, i.e. PCIT. He submits that the moment the PCIT has pushed in "Generate Tap in ITBA System" his satisfaction under Section 151 of the Act, 1961, would be deemed to be an authenticated document in terms of Section 282A and thus is a valid satisfaction under Section 151 of the Act, 1961. The digital signature affixed by the PCIT on his aforesaid satisfaction under Section 151 of the Act, 1961, subsequent to issuance of the notice by the Assessing Officer under Section 148, would not invalidate the notices under Section 148 of the Act, 1961. He referred to paragraphs 17, 18 and 19 of the supplementary counter affidavit dated 02.05.2022 sworn by Nisha Gupta, Income Tax officer, Ward-5(2)(5), NOIDA, which read as under: "17. That a perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment of said sub11 section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation.-For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in case of electronic mail or electronic mail message (hereinafter referred to as the e-mail), if the name and office of such income-tax authority- (i) is printed on the e-mail body, if the notice or other document is in the e-mail body itself; or (ii) is printed on the attachment to the e-mail, if the notice or other document is in the attachment, and the e-mail is issued from the designated e-mail address of such income-tax authority; (b) in case of an electronic record, if the name and office of the income-tax authority- (i) is displayed as a part of the electronic record, if the notice or other document is contained as text or remark in the electronic record itself; or (ii) is printed on the attachment in the electronic record, if the notice or other document is in the attachment, and such electronic record is displayed on the designated website. (2) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall specify the designated e-mail address of the income-tax authority, the designated website and the procedure, formats and standards for ensuring authenticity of the communication. Explanation. - For the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, an assessing officer gets jurisdiction to issue notice to an assessee under Section 148 of the Act, 1961 after Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income Tax is satisfied on the reason recorded by the assessing officer that it is a fit case for issuing such notice. The date and time of the approval granted digitally under Section 151 of the Act and the date and time of the notice under section 148 of the Act, shows that the satisfaction was recorded by the PCIT digitally after the notice under section 148 was digitally signed and issued by the Assessing Officer. 14. Thus, the following questions arise for consideration:- (a) Whether an unsigned content in an electronic record said to be pushed through electronic mode at a particular point of time, can be said to be a valid satisfaction of the PCIT under Section 151 for assumption of jurisdiction by the Assessing Officer to issue jurisdictional notice to an assessee under Section 148 of the Act, 1961? (b) Whether impugned notices under Section 148 of the Act, 1961 issued by the Assessing Officer without satisfaction signed by the PCIT under Section 151 of the Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Section 3(56) of the General Clauses Act, 1897, as under: "3(56) "sign", with its grammatical variations and cognate expressions, shall, with reference to a person who is unable to write his name, include "mark", with its grammatical variations and cognate expressions;" 21. As per Webster's New World Dictionary, the word 'sign' means 'to write one's name on, as in acknowledging authorship, authorising action etc.' In Rattan Anmol Singh vs. Ch. Atma Ram, 1955 (1) SCR 481 : AIR 1954 SC 510 (para-6), Hon'ble Supreme Court explained the meaning of the word 'sign' and held as under: "6. The Oxford English Dictionary sets out thirteen shades of meaning to the word "subscribe", most of them either obsolete or now rarely used. The only two which can have any real relation to the present matter are the following: 1. "To write (one's name or mark) on, originally at the bottom of a document, especially as a witness or contesting party; to sign one's name to." This meaning is described as "rare." 2. "To sign one's name to; to signify assent or adhesion to by signing one's name; to attest by signing." This appears to be its modern meaning, and is also one of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reason for any omitted signature is stated. ......... .... ............. (4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place. (5) After the arbitral award is made, a signed copy shall be delivered to each party." 26. Section 31 (1) is couched in mandatory terms, and provides that an arbitral award shall be made in writing and signed by all the members of the arbitral tribunal. If the arbitral tribunal comprises of more than one arbitrator, the award is made when the arbitrators acting together finally express their decision in writing, and is authenticated by their signatures. An award takes legal effect only after it is signed by the arbitrators, which gives it authentication. There can be no finality of the award, except after it is signed, since signing of the award gives legal effect and validity to it. The making and delivery of the award are different stages of an arbitration proceeding. An award is made when it is authenticated by the person who makes it. The statute makes it obligatory for each of the members of the tribunal to sign the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t so many clear indications in the statutes under consideration in those cases as there are in the statute and the rules before us. Thus in Monks v. Jackson (1876) 1 C.P.C. 683 : (46 L.J.C.P. 162), which was a case under s.1(3), Municipal Elections Act (38 and 39 Vic. c. 40) which required delivery of the nomination paper" by the candidate himself or his proposer or seconder to the Town Clerk" it was held that this requirement was not satisfied by the delivery it by an agent. In The Queen v. Mansel Jones, (1889) 23 Q B.D. 29 : (60 L.T. 860) it was held that a person charged with any corrupt or illegal practice at a municipal election who was entitled, under s.38, Corrupt and Illegal Practices Prevention Act, 1883, to be "heard by himself" was not entitled to be heard by his counsel or solicitor. In re- Prince Blucher, (1931) 2 Ch. 70 : (100 L.J.Ch. 292) the English Court of Appeal held that a proposal of composition signed by the solicitors of a debtor, who was, by reason of his serious illness, unable to sign it, did not comply with the requirements of s.16(1) of the Bankruptcy Act, 1914, which required "a proposal in writing signed by him." The Court of Appeal applied the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng an intention to exclude the common law rule in the matter of the signature of the assessee, appellant or applicant on the return, appeal or application." 25. Thus the expression "shall be signed" used in Section 282A(1) of the Act 1961 makes the signing of the notice or other document by that authority a mandatory requirement. It is not a ministerial act or an empty formality which can be dispensed with. "Signed" means to sign 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. The document must be signed or mark must be affixed in such a way as to make it appear that the person signing it or affixing his mark is the author of it. Therefore, a notice or other document as referred in Section 282A (1) of the Act, 1961 will take legal effect only after it is signed by that Income Tax Authority, whether physically or digitally. The usage of the word "shall" make it a mandatory requirement. 26. In the case of Chhugamal Rajpal vs. S.P. Chaliha and others, (1971) 1 SCC 453 (para-5) : AIR 1971 SC 730 : (1971) ITR 603, Hon'ble Supreme Court considered the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he report submitted by the Income-tax Officer to the Commissioner, it is clear that he could not have had reasons to believe that by reason of the assessee's omission to disclose fully and truly all material facts necessary for his assessment for the accounting year in question, income chargeable to tax has escaped assessment for that year; nor could it be said that he as a consequence of information in his possession, had reasons to believe that the income chargeable to tax has escaped assessment for that year. We are not satisfied that the Income-tax Officer had any material before him which could satisfy the requirements of either clause (a) or (b) of Section 147. Therefore he could not have issued a notice under Section 148. Further the report submitted by him under Section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under Section 148. We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under Section 148. To Question No. 8 in the report which reads "Whether the Commissioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfaction empowering the Assessing Officer to assume jurisdiction to issue notice under section 148 of the Act, 1961. In other words, an Assessing Officer may issue jurisdictional notice under Section 148 only after the Prescribed Authority under section 151 of the Act records his satisfaction that it is fit case for issue of notice under section 148. 29. In the present set of facts there was no valid satisfaction recorded by the by the Prescribed Authority under section 151 of the Act, 1961 when the Assessing Officer issued notice to the assessees under section 148 of the Act, 1961. At the time when the notice under section 148 of the Act, 1961was issued by the Assessing Officer to the petitioner there was no valid satisfaction recorded by the Prescribed Authority i.e. the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Subsequent to issuance of the notice under section 148 of the Act, 1961 by the Assessing Officer, the satisfaction under section 151 was digitally signed by the Prescribed Authority. Therefore, the point of time when the Assessing Officer issued notices under section 148, he was having no jurisdiction to issue the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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