Notice issued u/s 148 invalid if not signed digitally or manually by AO – ITAT

Notice issued u/s 148 invalid if not signed digitally or manually by Assessing Officer – ITAT 

In a recent judgment, ITAT Kolkata quashed the assessment order u/s 147 as the notice  issued u/s 148 was invalid as it did not bear the signature of Assessing Officer either digitally or manually.

 ABCAUS Case Law Citation:
ABCAUS 4174 (2024) (07) ITAT

In the instant case, the assessee had challenged the order passed by the Commissioner of Income Tax (Appeals)-NFAC affirming the reopening of assessment u/s 148 of the Income Tax Act, 1961 (the Act).

The Assessing Officer (AO) received information from Investigation Wing that the assessee had received bogus long term capital gain from the sale of penny stock which was listed with Calcutta Stock Exchange.

Accordingly, the AO issued notice u/s 148 of the Act which was complied with by the assessee by filing return of income. The assessee filed and furnished before the AO various documents/evidences relating to purchase/sale of equity shares during the proceedings. However the submissions of the assessee did not favour with the AO and as a result the entire long term capital gain was added to the income of the assessee in the assessment framed u/s 143(3) r.w.s. 147 of the Act.

Before the Tribunal the assessee inter alia challenged the validity of notice u/s 148 and contended that Notice u/s 148 was unsigned and hence not valid. It was submitted that the service of valid notice is a pre-condition to assume jurisdiction by the AO.

It was also submitted that the AO who had issued the impugned notice was not in charge of the jurisdictional ward of the assessee. The assessee stated that notice u/s 148 was issued by AO who did not have the jurisdiction and on this count alone the entire reassessment proceedings were bad in law and consequent assessment framed was also invalid and non-est in the eyes of law.

The assessee relied upon the judgment of the Hon’ble High Court where it had been held that notice issued u/s 148 has to be signed either digitally or manually failing which the notice issued is invalid.

The Tribunal observed that the notice u/s 148 had not been signed either digitally or manually. Apparently notice issued u/s 148 of the Act was without any signature digitally or manually of the authority issuing the said notice.

The Tribunal also noted that the Hon’ble High Court has held that the notice u/s 148 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.

Thus, following the decision of the Hon’ble High Court that re-opening of assessment on the basis of a notice issued u/s 148 of the Act which is unsigned is invalid, the Tribunal quashed the assessment framed by AO as without jurisdiction as the notice issued u/s 148 was invalid as it did not bear the signature of AO. 

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