Venish Vinodray Lalani Vs ITO (ITAT Rajkot)
Unsigned Section 151 Approval Invalidates Reassessment: ITAT Rajkot Deletes Addition
Introduction
The Income Tax Appellate Tribunal, Rajkot Bench, allowed the assessee’s appeal after finding that the approval under Section 151 of the Income Tax Act, 1961, was neither manually nor digitally signed.
Following its coordinate Bench decision in Rolex Rings Limited Vs. DCIT, the Tribunal accepted the challenge to reassessment founded on the defective approval. It held the issue covered in the assessee’s favour and deleted the addition.
The decision concerns the validity of the approval supporting reassessment, rather than the substantive merits of the addition. The Tribunal emphasised the importance of a properly authenticated sanction for the Assessing Officer’s assumption of jurisdiction.
Background of the Case
The assessee, Venish Vinodray Lalani, proprietor of Nandini Sarees Ghar, challenged the order dated 30 December 2025 passed by the CIT(A), National Faceless Appeal Centre, Delhi.
That appellate order arose from an assessment completed under Section 147 on 16 March 2025 for Assessment Year 2020-21.
Before the Tribunal, the assessee’s representative drew attention to the approval granted by the income tax authority under Section 151. He submitted that the approval contained neither a digital signature nor a manual signature and therefore could not validly support the reassessment proceedings.
The Revenue relied on the Assessing Officer’s findings.
Assessee’s Reliance on Coordinate Bench Ruling
The assessee relied on Rolex Rings Limited Vs. DCIT, ITA No. 893/Rjt/2025, submitting that the legal issue and relevant facts were identical.
In that decision, the Rajkot Bench had examined the consequences of an unsigned approval under Section 151. It concluded that an approval lacking the required authentication could not establish a valid sanction by the competent authority.
The assessee accordingly argued that the reassessment proceedings in his case were unsustainable for want of valid approval.
A copy of the coordinate Bench ruling was placed before the Tribunal, which reproduced its relevant reasoning in the order.
Signature Treated as a Mandatory Requirement
The reproduced decision examined Section 282A, dealing with authentication of notices and other documents issued by income tax authorities.
It treated the requirement of signing a document as mandatory rather than a mere formality. The reasoning distinguished between signing a document and the subsequent act of issuing or communicating it.
For paper documents, the decision referred to manual signatures. For documents communicated electronically, it discussed digital authentication and the role of a Digital Signature Certificate in establishing the issuing authority’s identity and preserving the document’s integrity.
The central concern was whether the approval could be attributed to the competent authority and whether there was evidence of that authority’s satisfaction.
Authentication and Evidence of Satisfaction
The coordinate Bench ruling also referred to Dhanji Hirani Vs. ITO (International Taxation), ITA No. 131/Rjt/2025.
The passage reproduced from that decision recognised that properly recorded digital approvals, including authenticated login-based approvals, may suffice legally. However, where neither physical nor digital authentication establishes the approving authority’s satisfaction, the approval may be invalid.
This qualification is relevant to the scope of the reasoning. The issue was the absence of an authenticated approval, rather than a general rejection of electronic approval mechanisms.
In the present appeal, the assessee’s case was that the approval was unsigned in both forms, and the Revenue produced no material sufficient to distinguish the precedent.
Judicial Authorities Discussed
The reasoning adopted by the Tribunal referred to several decisions concerning unsigned notices, orders and approvals.
These included Daujee Abhushan Bhandar (P.) Ltd. Vs. Union of India and Vikas Gupta Vs. Union of India, addressing authentication and the validity of unsigned documents.
It also referred to Reuters Asia Pacific Ltd. Vs. DCIT and the Bombay High Court’s decision in Prakash Krishnavtar Bhardwaj Vs. ITO.
The principle drawn from these authorities was that a defect in a jurisdictional document can undermine the proceedings founded upon it. In the context of Section 151, the coordinate Bench had held that an unsigned sanction did not permit valid assumption of jurisdiction to issue notice under Section 148.
Tribunal’s Decision
Dr. Arjun Lal Saini, Accountant Member, found no reason to depart from the decision in Rolex Rings Limited.
The Tribunal recorded that there was no change in the relevant facts or law, and the Revenue had not produced material to controvert the coordinate Bench’s findings.
Respectfully following that precedent, it deleted the addition and allowed the assessee’s appeal.
The order does not specify the amount or substantive nature of the addition deleted. Its operative relief rests on the legal challenge concerning defective approval.
The decision highlights that sanction under Section 151 must be supported by valid authentication. On the facts accepted by the Tribunal, the absence of both manual and digital signatures rendered the approval defective and entitled the assessee to relief.
Cases Discussed
- Rolex Rings Limited Vs DCIT (ITAT Rajkot); ITA No. 893/Rjt/2025 — Directly followed by the Tribunal. The quoted decision held that reassessment based on unsigned approval under Section 151 was invalid.
- Dhanji Hirani Vs ITO (International Taxation) (ITAT Rajkot); ITA No. 131/Rjt/2025 — Discussed in the reproduced ruling concerning the need for authenticated sanction and the possibility of properly recorded electronic approvals.
- Daujee Abhushan Bhandar (P.) Ltd. Vs Union of India (Allahabad High Court); [2022] 136 taxmann.com 246; 286 Taxman 623; 444 ITR 41 — Discussed the distinction between signing a notice and its issuance or communication.
- Vikas Gupta Vs Union of India (Allahabad High Court); [2022] 142 taxmann.com 253; 289 Taxman 443; 448 ITR 1 — Cited for the invalidity of an unauthenticated Section 151 approval.
- Reuters Asia Pacific Ltd. Vs DCIT (ITAT Mumbai); [2023] 157 taxmann.com 705; 205 ITD 31; 110 ITR(T) 609 — Considered the validity of an unsigned assessment order under Section 282A and Rule 127A.
- Shri Prahlad Singh Vs ITO (ITAT Delhi); ITA No. 3375/DEL/2017 — Referred to concerning unsigned notices and recorded reasons.
- Prakash Krishnavtar Bhardwaj Vs ITO (Bombay High Court); [2023] 150 taxmann.com 60 — Cited for the proposition that an unsigned Section 148 notice does not confer reassessment jurisdiction.
- Sri Sesha Sai Township P. Ltd. Vs ACIT (ITAT Visakhapatnam); ITA Nos. 301 & 302/Viz/2015 — Discussed the consequences of unsigned reasons and satisfaction for proceedings under Section 153C.
- Taureg Properties & Security Vs DCIT (ITAT Delhi); ITA No. 733/Del/2016 — Cited regarding an unsigned jurisdictional notice under Section 148.
FULL TEXT OF THE ORIGINAL JUDGMENT/ORDER
Captioned appeal filed by the assessee, pertaining to Assessment Year 2020-21, is directed against the order under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi, dated 30.12.2025, which in turn arises out of an assessment order passed by the Assessing Officer u/s 147 of the Act, on 16.03.2025.
2. When this appeal was called out for hearing, the Ld. Counsel for the assessee invited my attention towards to various decisions of the Hon’ble ITAT, Rajkot Bench in the case of Rolex Rings Limited, v. DCIT, in ITA No. 893/Rjt/2025, wherein it was held that based on defective approval u/s. 151 of the Act, the reassessment order framed is bad in law. In the assessee’s case, the approval given by the Income Tax Authority u/s. 151 of the Act is neither signed digitally nor signed manually, therefore, the reassessment proceedings initiated against the assessee based on defective approval is not sustainable in the eye of law. The Ld. Counsel also submitted that present appeal is squarely covered by the above said judgement of th e Tribunal. A copy of the judgement was also placed before the Bench.
3. On the other hand, the Ld. DR for the revenue relied on the findings of the assessing officer.
4. I see no reason to take any other view of the matter then the view so taken by the Hon’ble ITAT, Rajkot Bench in the case of Rolex Rings Limited, v. DCIT, in ITA No. 893/Rjt/2025 (supra). in this order the Tribunal has inter-alia observed as follows:
“24. We also find merit in the submissions of Learned Counsel for the assessee, to the effect that approval given by the higher authority under section 151 of the Act is neither signed manually nor digitally. A notice or an order or any other documents without having signature of the person who has issued such notice loses its relevance and importance and is to be treated as invalid. Any document without signature is not a document for execution or implementation. Therefore, it can be stated that no approval was granted by the competent authority, as the approval under section 151 of the Act, is neither signed manually nor digitally. We note that provisions of section 282A deal with authentication of notices and other documents issued by the Department. With reference to the same the provision of section 282 of the Act is reproduced as under:
“Authentication of notices and other documents.
282A. (1) Where this Act requires a notice or other document to be issued by any income-tax authority, such notice or other document shall be signed and issued in paper form or communicated in electronic form by that authority in accordance with such procedure as may be prescribed.
(2) Every notice or other document to be issued, served or given for the purposes of this Act by any income-tax authority, shall be deemed to be authenticated if the name and office of a designated income-tax authority is printed, stamped or otherwise written thereon
(3) For the purposes of this section, a designated income-tax authority shall mean any income-tax authority authorised by the Board to issue, serve or give such notice or other document after authentication in the manner as provided in sub-section (2).
25. It can be said from the plain reading of sub section 1 of the section 282A that any notice or other documents to be issued would not vest assessing officer with any further jurisdiction to proceed to reassess income of the appellant. From the bare reading of the above provisions of section 282A, it is clear that sub-section (1) to section 282A uses word ‘shall before the words ‘be signed’ and after the word ‘signed’ conjunction word ‘and’ is used to differentiate between the mode in which the notice or document is issued i.e. either the notice or document is issued in paper form ‘OR’ communicated in electronic form.The requirement of signature on the notice or document issued is not merely formality but is a mandatory requirement and if such notice or document is issued in paper form, the signature shall be done manually and if the notice or document is issued /communicated electronically, the same shall bear signature of the designated Income-tax Authority via Digital Signature Certificate (DSC) i.e. signed digitally. The DSC Policy of 2018 mandates that every letter, notice, order, etc, issued to assessee or other addresses within the Department or outside the Department will have to be issued by using digital signature. The reason for the same is that when notice or document is communicated in electronic form bears valid digital signature, the recipient of the same would believe that the notice or document is issued by known sender, which authenticates i.e. proves the genuineness of the notice or document issued and most importantly, neither the sender can deny having issued such notice or document nor such notice or document can be altered by any person.
26. We find that Section 282A(1) prior to its substitution by the Finance Act, 2016 with effect from 1-6-2016 also required the notice or document issued to be signed. Therefore, the signing the notice or document before issuing the same is pre-requisite and after evolution of E-proceedings and issuing notices / documents / order, etc, in electronic form, the Legislature amended the provisions of section 282A(1) so that such notice or document can be issued in paper form OR communicated in electronic form, however, the requirement of signature is ‘not dispensed’ but remains and therefore, if such notice or document is issued in paper form, the same shall require manual signature and if such notice or document is communicated in electronic form, the same shall require to be signed digitally so as to make the notice or document authenticated. Therefore, this issue is squarely covered in favour of the assessee by the decision of the recent jurisdictional ITAT-Rajkot in the case of Dhanji Hirani v. ITO (Int. Taxn.) (ITA NO. 131/Rjt/2025) (Rajkot Trib.) The Tribunal held that:
“it is vivid that there is no signature of the concerned authority u/s 151 of the Income Tax Act 1961, in the absence of signature by the concerned Authority, the above approval document, cannot be enforced in the eye of law. In order to create a legal document, the first and primary condition is that it should be signed by the concerned authority. The court noted that section 151 of the Act, mandates prior approval of the “specified authority” before issuing a notice u/s 148 for income escaping assessment if the document granting approval lacks a manual or digital signature, it calls into question the authority’s satisfaction. Physical signature is the traditional evidence of approval. In ITBA (Income Tax Business Application), digital approvals (like authenticated login-based approvals) may suffice legally if appropriately recorded. Based on the approval note there is neither physical signature nor digital signature of any Income tax authority Where no authentication or evidence of the approving authority’s satisfaction is found (either digitally or physically), the approval may be deemed invalid. Absence of evidence showing application of mind or digital signature led to reassessment quashing, and consequently, the reassessment order framed by the assessing officer, based on the above approval should be quashed”.
27. On the identical facts, the decision of the Allahabad High Court in the case of Daujee Abhushan Bhandar (P.) Ltd. v. UOI [2022] 136 taxmann.com 246/286 Taxman 623/444 ITR 41 (Allahabad) clearly makes distinction between signing of notice and issuance or communication thereof. It is also held that as per the provision of section 282A(1), if the notice or document is issued/communicated in electronic form, digital signature of the same is must and prerequisite before issuing such notice or document. Similarly, in the case of Vikas Gupta v. UOI [2022] 142 taxmann.com 253/289 Taxman 443/448 ITR 1 (Allahabad), it has been held that unsigned approval under section 151 is not an authenticated document and is invalid and therefore, there was no jurisdiction with the Assessing Officer to issue notice u/s 148 of the Act.
28. Our view is also fortified by the decision of the Co-ordinate Bench of ITAT Mumbai, in the case of Reuters Asia Pacific Ltd. v. DCIT [2023] 157 taxmann.com 705/205 ITD 31/110 ITR(T) 609 (Mumbai Trib.), in the context of validity of unsigned assessment order served on the assessee in that case, the provisions of section 282A read with Rule 127A of Income tax Rules, 1962 was also dealt with and it was held that before issue of notice or order communicated to the assessee, the same has to be signed. The reliance is placed on the following decisions.
(i) Shri Prahlad Singh v. ITO (ITA No. 3375/DEL/2017) (Del. Trib.)
It was held that when the notice and other documents issued by the authority are without signature, the same is invalid. The judgement was delivered after placing reliance on various case laws and the decision delivered by the Hon’ble ITAT is also upheld by the Hon’ble Punjab & Haryana High Court on the grounds that the reason recorded being unsigned and unrecorded is invalid.
(ii) Prakash Krishnavtar Bhardwaj v. ITO [2023] 150 taxmann.com 60 (Bombay)
It was noted that notice under section 148 issued upon assessee had no signature affixed on it either digitally or manually and, accordingly, same was invalid and same would not vest Assessing Officer with any further jurisdiction to proceed to reassess income of assessee – Whether, therefore, impugned notice under section 148A(b) and order passed under section 148A(d) and further notice under section 148 were to be set aside – Held, yes [Para 21] [In favour of assessee]
(iii) Sri Sesha Sai Township P. Ltd. Vs. ACIT (ITA No. 301 & 302/Viz/2015) (Viz. Trib.)
An order without signature is not an order for execution or for implementation. In the case of the assessee, there was no signature of the AO who recorded the reasons for issue notice and for direction for issue of notice u/s 153C. Therefore, it is to be construed that no reasons were recorded by the AO as required u/s 153C of the Act. As per section 153C it is mandatory on the part of the AO to record satisfaction for issue of notice u/s 153C.
(iv) M/s Taureg Properties & Security v. DCIT (ITA. No. 733/Del./2016) (Delhi Trib.)
After considering the rival submissions, we do not find any merit in the Departmental Appeal. Copy of the notice under section 148 Dated 26.03.2007 is available at page-1 of the paper book. It is unsigned as well as did not mention any assessment year. Since unsigned notice have been sent to the assessee, therefore, it vitiate the entire re- assessment proceedings because it was the jurisdictional notice to initiate proceedings under section 147 of the I.T. Act, 1961. Since the notice itself was illegal and bad in Law, therefore, entire re-assessment proceedings have been vitiated and as such A.O. could not have assume the jurisdiction under section 148 of the I.T. Act, 1961 to frame the assessment against the assessee.
29. Therefore, considering the above facts and circumstances of the case, we find that the provisions of section 282A of the Act is of no assistance to the Department and it would be applicable only to a CPU ( central processing unit) which was nominated as designated authority by CBDT as required u/s 282A of the Act. Therefore, we are of the opinion that the assessment framed on the basis of unsigned approval u/s. 151 of the Act is bad in law and cannot be sustained in the eyes of law. Therefore, we are of the view that the sanction granted u/s 151 of the Act without signature is invalid and therefore the assessing officer failed to assume jurisdiction to issue notice u/s 148 of the Act. Therefore, the notice issued u/s 148 of the Act is bad in law for want of valid assumption of jurisdiction. Hence, we quash the reassessment order framed by the assessing officer on this score also.”
5. As the issue is squarely covered in favour of the assessee by the decision of the Hon’ble Rajkot Bench in the case of Rolex Rings Limited, v. DCIT, in ITA No. 893/Rjt/2025 (supra), and there is no change in facts and law and the revenue is unable to produce any material to controvert the aforesaid findings of the Division Bench (supra). I find no reason to interfere in the said order of the Division Bench. Therefore, respectfully following binding precedent of the Co-ordinate Bench. I delete the addition and allow the appeal of the assessee.
Order is pronounced in the open Court on 26/10/2026.
