Not signing reasons recorded for reopening invalidated the notice u/s 148. ITAT quashed the reopening as issue of the notice without recording reasons
The appellant assessee had preferred the instant appeal against the order of the CIT(A) in upholding the reopening the assessment where reasons recorded for issuance of the notice u/s 148 were not signed by the Assessing Officer (ITO/AO)
ABCAUS Case Law Citation:
ABCAUS 2335 (2018) (05) ITAT
The Assessing Officer noted that the assessee had sold land alongwith others. It was noticed that the assessee had not shown any capital gain although the land sold was an asset within the meaning of the provisions of section 2(14) of the Act. Accordingly, the AO issued notice u/s 148 of the Act. In response to further notice u/s 142(1), the assessee submitted that the original return filed may be treated as return filed in compliance to notice u/s 148 of the Act.
Accordingly notice u/s s 143(2) of the Act was issued and the assessment was completed by making addition on account of capital gain on the said sale of land which was the basis for reopening the assessment.
The assessee agitated the matter before the CIT(A) challenging the validity of the assessment as the reasons recorded were unsigned and there was no material to form a belief that income had escaped assessment. However, the CIT(A) dismissed the appeal.
On the contention of the unsigned reasons recorded by the AO, the Tribunal noted the following decisions:
|
Punjab and Haryana High Court |
The Hon’ble High Court held the reopening bad in law for the reason that the reasons recorded was without any signature of the AO which amounted to issue of the notice u/s 148 without recording reason. |
| Calcutta High Court | The Hon’ble High Court with reference to section 2(22) held that service of valid notice is pre condition to the jurisdiction of the AO. Non signing of a notice is not a clerical mistake and there cannot be any waiver by the assessee of an irregularity of an unsigned notice. |
| Madhya Pradesh High Court |
The Hon’ble High Court opined that section 282 of the Act provides that a notice under the Act may be served on the person named therein as if it were a summons issued by a court under the Code of Civil Procedure, 1908. Sub rule (3) of Rule 1 of Order 5, CPC, provides that every summons shall be signed by the judge or such officer, as he appoints. In view of this provision, the notice to show cause why penalty should not be levied issued by the ITO should have been signed by the ITO and the omission to do so invalidated the notice. It was further held that The provisions of section 292B of the Act intended to ensure that an inconsequential technicality does not defeat justice. But, the signing of a notice under Section 271(1)(a) of the Act is not merely an inconsequential technicality. It is a requirement of the provisions of Order 5, Rule 1(3) of the CPC, which are applicable by virtue of Section 282 of the Act. Under the circumstances, the provisions of Section 292B of the Act would not be attracted the notice was a valid notice in the eye of law. |
Accordingly, on the strength of the above judgments of various High Courts, the ITAT quashed the reopening of assessment.
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