Jagmag Mercantiles Private Limited Vs ITO (ITAT Kolkata)
Unsigned Section 148 Notice and No Failure to Disclose Facts: ITAT Kolkata Quashes Reopenings for Two Years
The Kolkata Bench of the ITAT allowed the assessee’s appeals for AYs 2013-14 and 2014-15 and quashed the reassessment proceedings on multiple jurisdictional grounds.
First, the Tribunal found that the notice issued under section 148 was unsigned, neither digitally nor manually. Relying on binding precedents of the Bombay High Court (Prakash Krishnavtar Bhardwaj), Karnataka High Court (Panjos Builders), and the jurisdictional Calcutta High Court (Aparna Agency), the ITAT held that an unsigned notice is void ab initio and does not confer jurisdiction on the Assessing Officer. Consequently, all proceedings flowing from such notice were held invalid.
Secondly, the Tribunal noted that the original assessments had been completed under section 143(3) and the reassessments were initiated after four years from the end of the relevant assessment years. In such cases, reopening is permissible only if there is a failure on the part of the assessee to fully and truly disclose material facts. On examining the recorded reasons, the ITAT found that the Assessing Officer had merely reproduced a bald allegation of failure without demonstrating any specific non-disclosure by the assessee. The information relied upon—receipt of funds from certain entities—was already disclosed in the books of account.
Applying settled law laid down by the Supreme Court in Foramer France and L&T Ltd., as well as jurisdictional High Court rulings, the Tribunal held that mere escapement of income or receipt of third-party information cannot justify reopening beyond four years in the absence of proven failure to disclose.
Since both jurisdictional conditions were violated, the ITAT quashed the reassessment notices and consequential assessment orders for both assessment years. Accordingly, both appeals were allowed in full.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
