Case Law Details
Sai Kumar Mateti Vs ITO (Telangana High Court)
Unsigned Reassessment Notice Quashed: Telangana High Court Strikes Down Section 148 Notice for Mandatory Non-Compliance
The Telangana High Court, in the case of Sri Sai Kumar Mateti v. Income Tax Officer, quashed a reassessment notice issued under Section 148 of the Income-tax Act, 1961, on the ground that the notice was not authenticated in the manner mandated by law. The notice dated 31.03.2021, issued for the Assessment Year 2013–14, did not bear either a manual signature or a digital signature of the issuing authority.
The Court examined the statutory requirement under Section 282A of the Income-tax Act, which mandates that any notice issued by an income-tax authority must be duly signed, either in physical form or through digital authentication. It was observed that the impugned notice, as well as the copy produced by the Department, admittedly lacked such authentication. The Revenue’s contention that subsequent participation by the assessee or later digitally signed approvals could cure the defect was expressly rejected.
Emphasising that compliance with Section 282A is mandatory and not a mere procedural formality, the High Court held that the reassessment notice was invalid and bad in law. Consequently, all proceedings initiated pursuant to the unsigned notice were rendered unsustainable and were quashed. However, since the interference was on a technical ground, the Court reserved liberty to the Department to initiate fresh proceedings strictly in accordance with law. No order as to costs was made.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
The challenge in the present Writ Petition is to the notice, dated 31.03.2021 under Section 148 of the Income Tax Act, 1961 (for short “the Act, 1961”) for reassessment for the Assessment Year 2013-14 on the ground of escape assessment within the meaning of Section 147 of the Act, 1961.
2. This Court, while entertaining this Writ Petition on 24.03.2022, on the ground that impugned notice did not bear the signature of the issuing authority either manual or digital, had stayed further proceedings of the impugned notice. The Department was put on notice and they have filed their counter. In the counter, the respondents, though contended that the notice under Section 148 of the Act, 1961 has been duly served upon the assessee, and the assessee had duly entered appearance before the authority concerned, and submitted their response. Subsequently, notice under Section 151 of the Act, 1961 was also issued which was duly signed with digital signature. Therefore, in case if a notice under Section 148 of the Act, 1961 does not bear a digital signature by itself would not render the said document either non-est or bad in law.
3. It would be relevant at this juncture to take note of the fact that Annexure-P1 which is put to challenge in this Writ Petition is the same document which is also being enclosed by the Department along with their counter as Annexure R-2. Both these documents which are one and the same, and do not bear either manual signature or the digital signature of the authority concerned who issued the same.
4. In this context, it would be relevant at this juncture to take note of the provision of Section 282(A) of the Act, 1961, and for ready reference, it is reproduced hereunder:-
“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.
(i) 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.
(ii) 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).”
5. From the plain reading of the aforesaid provision of law under sub-Section (1) of Section 282A clearly envisages that when the Department intends to issue a notice, the same has to be duly signed either manually or digitally. The said provision has a mandatory force of law. This requirement under sub-Section (1) of Section 282A is missing in the notice issued under Section 148 of the Act, 1961 by the Department. Since there is a mandatory requirement for compliance of sub-Section (1) and (2) of Section 282A, and in the absence of there being a signature either manual or digital of the authority concerned issuing the same, which is the requirement under sub-Section (1), we are of the considered opinion that the notice under Section 148 of the Act, 1961 to the aforesaid extent is bad in law and the consequential proceedings initiated would also therefore become bad. Thus, we are of the considered opinion that the impugned notice under Section 148 of the Act, 1961 therefore requires to be set-aside/quashed, and is accordingly set-aside.
6. However, the right of the respondent – Department stands reserved to initiate appropriate proceedings afresh, if they so desire, against the assessee, subject to the initiation being in accordance with law. The right of the Department is being reserved only for the reason that the interference by this Court is only on technicality of the notice issued under Section 148 of the Act, 1961 having not met the requirement as is prescribed under Section 282(A)(1) of the Act, 1961.
7. In view of the above discussions, this Writ Petition stands allowed. There shall be no order as to costs.
Consequently, miscellaneous applications pending, if any, shall stand closed.
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