Case Law Details
Baban Tukaram Khade Vs ITO (ITAT Pune)
In the case of Baban Tukaram Khade Vs ITO, the ITAT Pune invalidated an order issued by the National Faceless Appeal Centre (NFAC) due to the lack of a valid digital or physical signature. The unsigned order, dated January 12, 2024, was passed under Section 250 of the Income Tax Act, 1961, concerning the assessment year 2017-18. The assessee challenged the validity of the order, citing that without a signature, the order had no legal effect. The tribunal agreed, referring to Section 282A of the Income Tax Act and Rule 127A of the Income Tax Rules, which mandate that notices or orders must be duly signed to be legally enforceable. Citing judicial precedent, the ITAT noted that unsigned orders fail to create any legal liability or rights for either party. Consequently, the tribunal set aside the NFAC’s order and remanded the case for re-adjudication, directing the NFAC to issue a fresh order after providing the assessee with at least three hearing opportunities. The case was remanded for statistical purposes, emphasizing the need for compliance with proper procedural requirements.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal of the assessee challenges the DIN & Order No. ITBA/NFAC/S/250/2023-24/1059661545(1) dt. 12/01/2024 passed u/s 250 of the Income-tax Act, 1961 [‘the Act’ hereinafter] by the National Faceless Appeal Centre [‘NFAC’ hereinafter] which in turn arisen out of order of assessment passed u/s 143(3) of the Act by the Income Tax Officer, Ward-1(3), Nashik [‘AO’ hereinafter] for assessment year 2017-18 [‘AY’ hereinafter];
2. In the course of hybrid hearing, the Ld. AR Mr Joshi without adverting to facts & merits of the case, at the outset has candidly invited our attention to the impugned order and submitted that, the impugned first appellate order 12/01/2024 was communicated to the assessee online through the web portal.
Though this impugned order bears the DIN number but it does neither signed digitally nor physically by the Ld. NFAC. An unsigned order ceases to give any cause of action to both the rival parties. However the assessee should not be saddled with liability for the fault of Revenue. Considering the facts holistically, the impugned order if treated as non-est then to meet the justice, the matter may be remanded to the file of Ld. NFAC with the direction to re-adjudicate the issue after giving opportunity to the appellant assessee. Per contra, solidifying the facts the Ld. DR did express his no objecting for remand.
3. Heard rival submission on former limited issue and subject to the provisions of rule 18 of Income Tax Appellate Tribunal Rules, 1963 [for short ‘ITAT, Rules’] perused the material placed on records and considered the facts in the light of settled position of law.
4. We note that, the provisions of section 282A of the Act prescribes that a notice or any other document related to income tax to be issued under the income tax law by any authorised Income-tax authority, such notice or document shall require to be signed by the concerned issuing Income Tax authority and they further shall be issued in paper form or communicated in electronic form as prescribed u/r 127A of IT Rules, 1962. Therefore, any notice or other document such as summon, order etc., issued inconsonance with the provisions of section 282A of the Act r.w.r. 127A of IT Rules, 192 renders it irregular and ceases to have any effect in law. This view finds fortified in the matter of ‘Ramani Suchit Malushte Vs. UOI’ [WP No 9331 of 2022], wherein the Hon’ble Jurisdictional Bombay High Court while dealing with electronic communication of order categorically held that; ‘unless digital signature is put by the issuing authority on the order, that order will have no effect in the eyes of law’.
5. In the instant case admittedly the impugned order was communicated electronically does bear no digital signature of the first appellate authority who adjudicated the appeal, hence in view of the former judicial precedent it ceased to have any effect in the eyes of law. In effect giving no rights or creating no liability to either party, thus the entitlement to prosecute the appeal. However, to avoid the multiplicity of litigation, we deem it fit to set-aside the impugned order and remand the matter back to the Ld. NFAC at the stage of institution of appeal before it with a direction to adjudicate the issue de-novo in accordance with law preferably in three effective opportunities of hearing to the appellant assessee and pass a speaking order in terms of section 250(6) of the Act and incompliance with the provisions of section 282A of the Act.
6. The assessee’s appeal in result ALLOWED FOR STATISTICAL PURPOSES
In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Friday, 02nd August, 2024.
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