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TMI Blog2024 (3) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... her bank account maintained with UCO Bank, Branch : Durg, and had also earned salary income of Rs. 5,10,222/- from Bhilai Institute of Technology, Durg, but had failed to file her return of income, initiated proceedings u/s. 147 of the Act. Notice u/s. 148 of the Act dated 27.03.2018 was duly served upon the assessee. 3. As the assessee despite sufficient opportunity failed to participate in the course of the assessment proceedings, therefore, the A.O was constrained to proceed with and frame the assessment on an ex-parte basis. 4. After calling for the assessee's bank A/c. No.18290100003441 maintained with UCO Bank, Branch : Bitech, G.E. Road, Durg, the A.O observed that she had made cash deposits of Rs. 11 lacs during the year under consideration. Also, the A.O observed that the assessee had during the subject year earned salary income of Rs. 5,10,222/- from Bhilai Institute of Technology, Durg. As the assessee had failed to come forth with any plausible explanation as regards the source of the cash deposits of Rs. 11 lacs (supra) made in her bank account and had also failed to offer her salary income for tax, the A.O vide his order passed u/s. 144 r.w.s. 147 of the Act da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 8. Shri S.R Rao, Ld. Authorized Representative (for short 'AR') for the assessee at the threshold of hearing submitted that the present appeal involves a delay of 14 days. Elaborating on the reasons leading to the aforesaid delay, it was submitted by him that the same had occasioned for the reason that the CIT(Appeals) had vide an ex-parte order disposed off the assessee's appeal. Carrying his contention further, the Ld. AR submitted that while for the assessee in the course of hearing of the appeal was pursuing the A.O for making available to her copy of the reasons recorded u/s. 148 of the Act a/w. copy of approval of the prescribed authority u/s. 151 of the Act and had sought for adjournment on the said ground before the CIT(Appeals), but the latter had proceeded with and not to the knowledge of the assessee disposed her appeal vide an ex-parte order dated 24.05.2023. It was submitted by the Ld. AR that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cet contentions, viz. (i) that though the assessee held a bank account with UCO Bank, Branch : Durg jointly with her husband, Shri Kuldeep Sharma but the A.O had wrongly reopened the case on the basis of factually incorrect observation that the cash deposits were made in the assessee's individual account; (ii) that the approval granted by the Pr. CIT (through Jt. CIT) u/s. 151 of the Act is undated; (iii) that the A.O had in the "reasons to believe" failed to record his satisfaction that the income of the assessee chargeable to tax had escaped assessment; (iv) the satisfaction recorded by the A.O is not in conformity with Para 4 of the Standard Procedure for recording satisfaction u/s. 147 of the Act, dated 10.01.2018 issued by CBDT; (v) that the A.O had failed to supply copy of reasons recorded u/s. 148(2) of the Act a/w. copy of approval u/s. 151 of the Act and copy of the order sheet etc. which were made available only in the course of the proceedings before the Tribunal; (vi) that as the notice u/s. 148, dated 27.03.2018 was not signed by the A.O, manually or digitally, therefore, he had wrongly assumed jurisdiction and framed the impugned assessment vide his orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment for A.Yr. 2012-13 within the meaning of Explanation 2(a) of section 147 of the Income tax Act, 1961 and therefore, I am satisfied that this is fit case to initiate proceedings u/s. 147. Hence, it is proposed to assess the escaped income and any such other income which comes to the notice subsequently in the course of assessment proceedings u/s. 147 of the Act. Therefore kind approval may be granted for issuance of notice u/s. 148 of the IT Act, 1961. Bhilai, Dated: 15/02/2018 Sd/- (Sujit Bhattacharjee) Income Tax Officer-1(2), Bhilai" On careful perusal of the aforesaid "reasons to believe", it can safely be gathered that the A.O taking cognizance of the fact that though the assessee during the subject year had made cash deposits of Rs. 11 lacs in her bank account maintained with UCO Bank and also had received salary income of Rs. 5,10,222/- but had failed to file her return of income for the year under consideration, had thus initiated proceedings u/s. 147 of the Act. As the A.O had sufficient material before him which had clear nexus leading to formation of belief that the income of the assessee chargeable to tax has escaped assessment, I am unable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons holding a bonafide belief that her income aggregating to Rs. 16,10,222/- [ Rs. 11,00,000/- (+) Rs. 5,10,222/-] had escaped assessment, initiated proceedings u/s. 147 of the Act. In my view, the aforesaid information which is found to be factually correct had a "live link" with the formation of the bonafide belief by the A.O that the income of the assessee chargeable to tax to the tune of Rs. 16,10,222/- had escaped assessment. It is not the case of the assessee that she had filed her return of income wherein either the source of the aforesaid cash deposits or her salary income was duly offered for tax, but it is a case of an assessee who despite having carried out substantial cash transactions and having earned salary income which was subjected to deduction of tax at source, had failed to file her return of income. Based on the aforesaid facts, I am unable to concur with the contentions of the Ld. AR that the reasons and the material available before the A.O, based on which, proceeding u/s. 147 of the Act was initiated in the case of the assessee are not in conformity with the standard procedure dated 10.01.2018 (supra) laid down by the CBDT. At this stage, I am remi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by the Ld. AR on the judgment of the Hon'ble High Court of Chhattisgarh in the case of DCIT Vs. Sunita Finlease [2011] 330 ITR 491 (CG) being factually distinguishable would not assist the case of the assessee before me. I, say so, for the reason that the Hon'ble High Court had in its judgment observed that orders, instructions or directions issued by the CBDT for proper administration of the Act or for such purposes specified under sub-section (2) of Section 119 of the Act would be binding on the revenue authority. I may herein observe that as held by the Hon'ble Jurisdictional High Court though the orders, instructions or directors issued by the CBDT are binding on the revenue authority, but the standard procedure laid down by the CBDT as an internal guideline for the AO's does not find any mention in the aforesaid judicial pronouncement. Also, the judgment of the Hon'ble Supreme Court in the case of UCO Bank Vs. CIT (1999) 237 ITR 889 (SC) pressed into service by the Ld. AR is also in the context of circulars issued by the CBDT. To sum up, the aforesaid judicial pronouncements as had been pressed into service by the Ld. AR being factually distinguishable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceed and assess the income of the assessee. My aforesaid conviction is fortified by the judgement of the Hon'ble High Court of Bombay in the case of Prakash Krishnavtar Bhardwaj Vs. ITO (2023) 451 ITR 27 (Bom.), wherein involving identical facts, the Hon'ble High Court had observed that as the notice u/s. 148 dated 02.04.2022 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. For the sake of clarity, the observations of the Hon'ble High Court of Bombay are culled out as under: "21. We are, therefore, of the considered opinion that in the present case, the notice u/s. 148 dated 02.04.2022 having no signature affixed on it, digitally or manually, the same is invalid and would not vest the Assessing Officer with any further jurisdiction to proceed to reassess the income of the petitioner. Consequently, the notice dated 02.04.2022 u/s. 148 of the Act issued to the petitioner being invalid and sought to be issued after three years from the end of the relevant assessment year 2015-16 with which we are con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, 1961 specifically provides recording of satisfaction by the Prescribed Authority, on the reasons recorded by the Assessing Officer that it is a fit case for the issue of notice under section 148 of the Act, 1961. Unless such satisfaction is recorded, the Assessing Officer could not get jurisdiction to issue notice under section 148. A satisfaction, to be a valid satisfaction under section 151 of the Act, 1961, has to be recorded by the Prescribed Authority under his signature on application mind and not mechanically, as also held by the Hon'ble Supreme Court in the case of Chhugamal Rajpal (supra). Unless the Prescribed Authority under section 151 of the Act, 1961 records his satisfaction on application of mind and under his signature, there cannot be a valid satisfaction 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 satisfactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also by the facts that prior sanction of the Commissioner of Income-tax was obtained and that the assessee was not misled by the notice; and the non-signing might be a case of inadvertent omission. Still in my view, it is not a mere irregularity that can be cured. Non-signing of a notice under section 34 of the Income-tax Act does not come within the formula of an obvious clerical mistake. As the finality of the assessment is one of the main principles to be followed in tax cases and as the re-opening of the assessment under section 34 is a matter of public policy (though I am not unmindful that it is not a case of fundamental right) and as a right under section 34 is not intended to be conferred only for the benefit of the assessee (though it might dominate and condition the right of the assessee), i.e., it is not a private right, meant merely for individual benefit, there is a prima facie difficulty in my way to hold that there can be waiver of the notice under section 34 of the Income-tax Act. The subsequent conduct of the assessee is also of no moment." 24. Considering aforesaid factual position, i.e. absence of affixation of signature of the A.O, manually or digitally on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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