Krish Road Carriers Private Limited Vs ITO (ITAT Delhi Bench C)
An Undated, Unsigned “Approved” Is Not Approval: Reassessment Quashed for Invalid Sanction u/s 151
Summary:
Background
Krish Road Carriers Pvt. Ltd. challenged reassessment proceedings completed for AY 2012-13. During the hearing before the Tribunal, the assessee raised an additional legal ground contending that the notice u/s 148 had been issued without obtaining valid approval from the specified authority u/s 151.
The additional ground had not formed part of the original memorandum of appeal. However, it involved a pure question of law, arose from the material already available on record & went to the root of the AO’s jurisdiction.
The Revenue did not object to its admission. Following NTPC Ltd. v. CIT, 229 ITR 383, the Tribunal admitted the ground for adjudication.
Two Approvals, but Was Either One Valid?
The relevant assessment year was AY 2012-13, while notice u/s 148 was issued on 22.03.2019. Since the proposed reopening fell within the category requiring sanction from the prescribed higher authority, valid satisfaction of the Pr. CIT was a condition precedent.
The assessee pointed out that the reopening proposal appeared to have travelled through two authorities—the Addl. CIT-14, New Delhi & the Pr. CIT, Delhi-5.
It argued that where s.151 designates a particular authority to grant sanction, approval must be independently granted by that authority in the manner prescribed. The statutory process cannot be replaced by a chain of endorsements from multiple authorities.
More importantly, the copy of the Pr. CIT’s approval supplied to the assessee was undated & carried neither a manual signature nor a valid digital signature.
A Standard Sentence Without Authentication
The purported sanction merely stated:
“Perused reasons recorded by the AO. I am satisfied that this is a fit case for issue of notice u/s 148 of the I.T. Act. Accordingly, approval is accorded.”
The assessee argued that this standard sentence, appearing on an unsigned & undated document, did not constitute a legally enforceable approval. It neither authenticated the identity of the approving authority nor established that approval existed before the AO issued the notice.
The absence of a date was particularly material because sanction must precede the issue of notice u/s 148. Without a date, it was impossible to verify the statutory sequence.
The Revenue produced another copy during the hearing which contained certain initials. However, the contents remained the same.
Signature Is Not an Empty Formality
The Tribunal considered s.282A, which governs authentication of notices & other documents issued by income-tax authorities.
Section 282A(1) uses the mandatory expression “shall be signed.” The document may thereafter be issued in paper form or communicated electronically in accordance with the prescribed procedure.
Relying upon J. Kumar Infraprojects Ltd. v. DCIT, the ITAT observed that signing & communication are two distinct acts. If a document is issued physically, it must carry a manual signature. If communicated electronically, it must be authenticated through the prescribed electronic or digital process.
A signature signifies the authority’s assent to & ownership of the decision. It confirms that the document reflects the conscious act of the designated officer. It cannot be dismissed as a mere ministerial formality.
The Tribunal also referred to the Allahabad High Court’s decisions in Daujee Abhushan Bhandar Pvt. Ltd. v. Union of India & Vikas Gupta v. Union of India, which held that an unsigned sanction u/s 151 does not confer jurisdiction upon the AO to issue notice u/s 148.
Initialed Departmental Copy Does Not Cure Supplied Approval
The Revenue sought to rely upon the copy containing initials, apparently available in the departmental record.
The Tribunal held that what mattered was the approval document actually shared with the assessee, not what might subsequently be presumed or demonstrated to exist in the assessment file.
The copy supplied to the assessee was unsigned & undated. Therefore, it did not establish that the prescribed authority had granted legally valid approval before the notice was issued.
The defect affected the AO’s jurisdiction at its inception. Subsequent production of another copy could not retrospectively validate a notice issued without demonstrable prior sanction.
Contrary Decision Considered
The Tribunal noted the Chhattisgarh High Court’s decision in Bharat Krishi Kendra v. Union of India, 444 ITR 584, where an unsigned approval bearing the name, designation, DIN & document number was treated as sufficiently authenticated under s.282A(2).
However, the Tribunal preferred the contrary view expressed by the Division Bench of the Allahabad High Court. It reasoned that s.282A(1), mandating signature, must be read together with s.282A(2), concerning authentication. Reading sub-s. (2) independently would make the signature requirement under sub-s. (1) redundant.
In the absence of a binding jurisdictional High Court decision, the interpretation favourable to the assessee was adopted following CIT v. Vegetable Products Ltd., 88 ITR 192.
Final Verdict
The ITAT held that the sanction u/s 151 was invalid because it was unsigned & undated. Consequently, the AO never acquired jurisdiction to issue notice u/s 148.
The notice was quashed, along with the consequential reassessment order passed u/s 143(3) r.w.s. 147. The remaining grounds were left open without adjudication, & the assessee’s appeal was allowed.
Author’s Comments
The ruling demonstrates that approval u/s 151 is not a ceremonial rubber stamp. It is a jurisdictional safeguard requiring conscious satisfaction, proper authentication & proof that the sanction preceded the notice.
An undated approval cannot establish chronology; an unsigned approval cannot establish authorship. When both defects coexist, the document says “approved” without proving who approved it or when.
The decision also exposes a continuing judicial divergence on the interaction between ss.282A(1) & 282A(2). Revenue may argue that a DIN, printed designation or designated electronic origin sufficiently authenticates the document. Assessees may rely upon the mandatory words “shall be signed” to contend that authentication cannot replace assent.
The Tribunal’s observation that the supplied copy prevails over a different departmental copy is particularly significant. Jurisdiction cannot depend upon a signature discovered in the file after the notice has already been challenged.
Cases Discussed
- NTPC Ltd. v. CIT, (1998) 229 ITR 383 (SC)
- J Kumar Infraprojects Ltd. v. DCIT, (2025) 176 taxmann.com 193 (Mumbai-Trib.)
- Daujee Abhushan Bhandar Pvt. Ltd. v. Union of India, Writ Tax No. 78 of 2022, order dated 10.03.2022
- Vikas Gupta v. Union of India, [2022] 448 ITR 1 (All.) (HC)
- Reuters Asia Pacific Ltd. v. Dy. CIT, ITA No. 587/Mum/2021, order dated 26.12.2023
- Bharat Krishi Kendra v. Union of India, [2022] 444 ITR 584
- CIT v. Vegetable Products Ltd., [1973] 88 ITR 192 (SC)
- Chhugamal Rajpal v. S.P. Chaliha, [1971] 79 ITR 603 (SC)
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT DELHI BENCH
1. This appeal is filed by the assessee against the order of ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 26.09.2024 for the Assessment Year 2012-13.
2. At the outset of the hearing, ld. AR for the assessee submitted that assessee has filed additional ground of appeal under Rule 11 of the Income Tax (Appellate Tribunal) Rules and it is purely legal issue and the same is reproduced below :-
“9. On the facts and circumstances of the case, the order passed by the NFAC is bad and liable to be quashed as the same was initiated by the ld. AO without obtaining the valid approval from the specified authority u/s 151 of the Act.”
3. Since the above ground of appeal is purely legal, do not require fresh facts to be investigated and go to the root of the matter, ld. AR of the assessee prayed that the same may be admitted in view of the judgement of NTPC Ltd. vs. CIT, (1998) 229 ITR 0383 (SC).
4. On the other hand, ld. DR for the Revenue has no objection of admitting the additional ground of appeal being purely legal issue.
5. In view of the reliance made by the ld. AR for the assessee on the judgment of Hon’ble Supreme Court in the case of NTPC Ltd. (supra) and issue being purely legal, we proceeded to admit the additional ground of appeal being a legal issue.
6. At the time of hearing, ld. AR of the assessee submitted that the approval has been taken from as many as two authorities i.e. Addl. CIT-14, New Delhi and Pr. CIT, Delhi-05. He submitted that it is a trite law that a provision has to be read and followed strictly, and if the provision requires the approval from one authority then only that authority should give the approval. He further submitted that the relevant AY is AY 2012-13 and the notice u/s 148 of the Income-tax Act, 1961 (for short ‘the Act’) was issued on 22.03.2019. It is necessary for the assessing officer to obtain the valid approval u/s 151 from the prescribed authority before the issuance of notice u/s 148, which in assessee’s case would be Principal CIT, however in assessee’s case, two approvals from two various authorities are taken, which is not permissible under law. In this regard, he relied on the following decisions :-
- Asok Kumar S/O Sher Singh Vs. ITO, Ward-1, ITA No. 509o/Del/2025, ITAT Delhi (CLC Pg. 32-38)
- Seema Mehta Vs. ITO, ITA No. 2405/Del/2 024, ITAT Delhi (CLC Pg. 39-43) ACIT Vs. M/s. Bharti Axa Life Insurance Company Ltd. and vice versa, CO No. 63/ Mum/2020 (arising out of ITA No. 293OMum/2019), ITAT Mumbai (CLC Pg. 44-60)
7. He further submitted that an approval taken u/s 151 without according the date by the Pr.CIT is an incomplete approval and renders the approval invalid and therefore the reassessment proceedings are to be quashed. He relied on the following decision :-
- Sanjay Kumar Vs. DCIT, ITA no. 5765/Dei/2 025, ITAT Delhi Undated approval accorded by Pr.CIT us 151 together with non application of mind leading to grant of mechanical approval.
8. As mentioned above, he submitted that the approval accorded by the Pr.CIT is without any date and name of the designated officer and further that the approval has been granted in a very mechanical manner and without giving finding of its own. In this regard, he brought to our attention the approval granted which is that :
“Perused reasons recorded by the AO. I am satisfied that this is a fit case for issue of notice us 148 of the I. T. Act, Accordingly, approval is accorded.”
9. In this regard, he relied on the following decisions :-
- Sumit Suneja Vs. ACIT, Circle 34(1). New Delhi, ITA No.3688/Del/2025, ITAT Delhi (CLC Pg. 4-6)
- Naveen Kumar Gupta Vs. ITO, ITA No. 592/Del2020, ITAT Delhi (CLC Pg. 7 – 15)
Mechanical Approval u/s 151
10. He further submitted that the approval has been taken in mechanical manner, therefore, the approval becomes invalid and resulting the reassessment proceedings infructuous and relied on the following decisions :-
- Tribhawan Vs. ITO, ITA No. 872/Del/2025, ITA Delhi (CLC Pg. 16-19)
- Pawan Agarwal Vs. ITO, Ward-1, ITA No. 386/Agr/2025, ITAT Agra ( 20-29)
- Sudhindra Pal Singh Vs. ITO, Ward-3(2), ITA No. 280/Agrl2025, I (CLC Pg. 30-31)
11. On the other hand, ld. DR of the Revenue submitted as under :-
Brief Facts: As borne out of the order of the AO and that of the Ld. CIT[A]: The prominent fact of this case is that the assessee was a non filer of ITR but found to have deposited cash into his bank account of Rs.51 lacs. Hence proceedings were initiated u/s 147/148 of the Income Tax Act, 1961. Assessee filed return of income in response to that said notice u/s 148 dated 22.03.2019 after a period of eight months which proves that the said notice was duly served upon the assessee before passing the assessment order. It is also worthwhile to note that the assessee did not raise any sort of jurisdictional objection during the assessment proceedings w.r.t section 124[3] of the Act.
On Reopening u/s 147: It is a settled legal position that at the stage of recording of reason, no final finding is required to be given and only prima facie belief is required to be reached by the assessing authority. The AO can initiate reassessment proceedings u/s 147 on the basis of credible and specific information available with him.
[Prima-facie case] The landmark decision of the Hon’ble Apex Court in Raymond Woollen Mills Ltd. Vs ITO 236 ITR 236 ITR4 (SC) wherein it was held that the AO is not to conclusively prove the escapement of income to assume jurisdiction u/s 147 of the Act.
[Prima-facie case] Hon’ble Jurisdictional Delhi High Court in the case of CIT Vs Nova Promoters & Finlease P Ltd [2012] 18 taxmann.com 217 [Delhi] has held that at the stage of issuing notice u/s 148, the merits of the case are not relevant and the Assessing Officer at that stage is required for form only prima facie belief or opinion that income chargeable to tax has escaped assessment.
[Cash Deposit and No ITR]: The Hon’ble Gujarat High Court in the case of Silverdale Inn P Ltd Vs ITO, [2021] 127 taxmann.com 679 [Gujarat], have opined vide order dated 16.02.2021 that where AO issued reopening notice against assessee on ground that an information was received from NMS [Non Filer Monitoring System] that assessee had received cash deposits of certain amount in a bank account but had not disclosed same in its return, since assessee failed to submit supporting evidences and source of income with regard to said cash deposits, impugned reopening notice issued against assessee was justified.
[Cash Deposit and No ITR]: The Hon’ble Bombay High Court in the case of Pharmacia Molio Vs ITO, [2022] 137 taxmann.com 256 [Bombay], have opined vide order dated 31.01.2022 that where AO sought to reopen assessment in case of assessee on discovering huge cash deposits against assessee’s PAN number and also discovered that the relevant assessment year, assessee chose not to file any return at all, reopening of assessment was justified as there was sufficient as well as relevant information to formation of reason to believe that income had escaped assessment.
[Cash Deposit and No ITR]: The Hon’ble P&H High Court in the case of Chand Prakash Vij Vs CIT in [2009] 315 ITR 251 [Punjab & Haryana] order dated 22.12.2008, has confirmed order of the ITAT where on receiving an information from Inv. Wing about cash deposit by the assessee in his bank account, notice u/s 148 was issued. Further the assessee could not prove and explain the source of the deposit it was added as income of the assessee and confirmed by the CIT[A] and Hon’ble Tribunal as well.
[Cash Deposit claimed to be out of periodical withdrawals]: The Hon’ble P&H High Court in the case of Kavita Chandra Vs CIT in ITA 421 of 2016 (O&M) order dated 07.03.2017, has confirmed order of the ITAT when the deposits in Bank were made after a gap of two-three instances of withdrawals and taking the totality of facts and circumstances of the case, the Tribunal concurred with the findings recorded by the CIT(A) that the withdrawals were for the purpose of business and not available for redeposit. Further, the withdrawals were re-deposited after a gap of two or three months which was not probable. Thus, the assessee was not able to link the cash withdrawn from the bank with the cash deposit. Consequently, the finding of the CIT(A) with regard to treating the cash deposit of ` 14,20,212/- as unexplained income of the assessee was upheld by the Tribunal.
ON GRANTING SANCTION U/S 151
So far as the contention of the appellant assessee, raised as additional ground that the approval of the competent authority granted u/s 151[1] was in a mechanical manner without application of mind is concerned, the following submission may kindly be considered:
1. That there is no infirmity in the approval/sanction granted by the competent authority u/s 151[1] of the I. T. Act, 1961.
2. That the statute does not lay down any manner or format in which the approval is to be granted.
3. That there is no double dual approval as contested by the Ld AR. The comments of the Additional Commissioner was not the approval but his endorsement cum satisfaction to the reasons recorded by the AO and recommendation to the competent authority i.e. the PCIT Delhi 5 who ultimately accorded approval for issue of notice u/s 148 in this case.
4. That the remarks of the competent authority may kindly be read with the first part of the column No.12 which reads “Whether the Pr. CIT, … is satisfied on the reason recorded by the AO in the case of M/s Krish Road Carriers Pvt Ltd for A.Y 2012-13 that it is a fit case for the issue of Notice u/s 148” along with the remarks “Perused reasons recorded by the AO. I am satisfied that this is a fit case for issue of notice u/s 148 of the IT Act, accordingly, approval is accorded” before the signatures are there in the approval form/column.
5. That the said approval note/proforma was duly forwarded to the AO vide office letter F.No.Pr.CIT-05/HQ/ u/s 148/2018-19/2938 dated 22.03.2019 under the signature of Shri M L Meghwal, ITO [Hqrs] in office of the competent authority Pr.CIT, Delhi-05 New Delhi. As such the approval can not be termed without any date. [copy attached]
6. That once an authority puts his/her signature [in original] he or she actually is recording his concurrence to the whole proposal of the AO along with the reasons recorded and the approving comment or remarks should not be read in solitary. Then it is not material as to whether the approving remark is typed/stamped or hand written.
7. That the Hon’ble Calcutta High Court in Prem Chand Shaw [Jaiswal] Vs ACIT [2016] 67 taxmann.com 339 has categorically held that
“the mere fact that the sanctioning authority did not record his satisfaction in so many words would not render invalid the sanction granted under section 151(2) when the reasons on the basis of which sanction was sought could not be assailed and even an appellate authority is not required to give reasons when it agrees with the finding unless statute or rules so requires.”
It was further held that there is no requirement to provide elaborate reasoning to arrive at a finding of approval when the PCIT is satisfied with the reasons recorded by the AO.
8. Virbhadra Singh Vs Deputy Commissioner, Circle Shimla [2017] 88 taxmann.com 888 (Himachal Pradesh) Where the competent authority was in agreement with the reasons assigned by the Assessing Officer, so placed before him, which came to be considered and sanction accorded with proper application of mind, by recording “I am satisfied that it is a fit case for issuance of notice u/s 148”, the issuance of notice under section 147/148 was held to be valid.
9. That the Hon’ble Delhi Court in the case of Experion Developers (P.) Ltd. v. ACIT [2020] 115 taxmann.com 338 (Delhi) in WP (C) NOS. 11302, 11303 OF 2019 CM APPL NOS. 46536 TO 46539 & 46540 TO 46542 OF 2019 FEBRUARY 13, 2020.
While discussing Section 151 of the Income-tax Act, 1961 – Income escaping assessment – Sanction for issue of notice (Recording of reasons) – held that where necessary sanction to issue reopening notice under section 148 was obtained from Pr. Commissioner as per provision of section 151, Pr. Commissioner was not required to provide elaborate reasoning to arrive at a finding of approval when he was satisfied with reasons of reopening. [Ref. Para 42 and 43 of the said order]
“Is it a requirement for issuance of notice for reopening of assessment proceedings under section 151 of the Act that the Principal Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for issuance of such notice.
In the recorded reasons also, it has been noted that “necessary sanction to issue notice under section 148 of the Act is being obtained separately from the Pr CIT, Delhi 03, New Delhi as per the provisions of section 151 of the Act”. In its reply on this issue, in the order dated 25.09.2019 dismissing objections of petitioner to the notice under section 148, it has been pointed out that the approval of the competent authority was obtained vide note sheet entries dated 31.03.2019 and the same was enclosed alongwith the order. However, the same has not been annexed to the present petitions. It has been argued that obtaining approval of the Additional Commissioner of Income Tax is not provided for under section 151 and therefore, the same is not justified. However, in the present case, approval/sanction has been obtained from both, the Addl. Commissioner of Income Tax as well as Principal Commissioner of Income Tax, which is the appropriate authority for issuance of such sanction, as noted in Commissioner of Income-tax-8 (Erstwhile CIT-III) V. Soyuz Industrial Resources Ltd [2015] 58 taxmann.com 336 (Delhi).”
Hence, the AO had validly assumed jurisdiction u/s 147/148 of the Act by recording the reasons to believe in accordance with the provisions of the Act u/s 147 of the Act and therefore, the ground of appeal on this deserves to be dismissed.
Further reliance is also taken on the following decisions:
Durga Prasad More 82 ITR 540; Sumati Dayal 214 ITR 801 and McDowell & Co. 154 ITR 148.
So far as the reliance by the appellant on several judgments presuming to be in its favour it is submitted that in those case the direct evidences, as available in this case were not available before the Hon’ble Benches hence, they are not applicable in this case.
As the facts are always distinct and separate in each case the principles of one case cannot be applied blindly to another case. In Union of India Vs Major Bahadur Singh [2006] 1 SCC 368 [Para 9 & 11] the Hon’ble Supreme Court held that the observations made in a judgment must be read in the context in which they appear to have been stated. Their lordships of the Supreme Court further held that circumstantial flexibility, one additional or different fact, may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision was held to be not proper. Thus, principles enunciated therein are different from the facts of the instant case and hence the appellant’s plea that these judgments are applicable to the appellant has no locus standi. In view of the detailed discussions in assessment order, order of Ld. CIT(A), as cases relied by the AO & Ld. CIT(A) above submissions and relevant case-laws, it is requested that the appeals of the assessee may kindly be dismissed. It is also requested to kindly allow further oral submissions, which may also be made during the course of hearing, if required.
Encl: as above
12. Considered the rival submissions and material placed on record. We observed that the assessee has challenged that the sanction for issue of notice u/s. 151 (i) accorded by the Pr.CIT was neither signed manually nor digitally and also undated. For the sake of clarity, we reproduce the aforesaid approval as under :-
Form for recording the reasons for initiating proceedings u/s 148 and for obtaining the approval of Pr. Commissioner of Income Tax 05, New Delhi
| 1. | Name and Address of the assessee | M/s Krish Road Carriers Pvt. Ltd. CW-71, Sanjay Gandhi Tranport Nagar, Delhi |
|---|---|---|
| 2 | Permanent Account NO. | AACCK9702G |
| 3 | Status | Company |
| 4 | District Circle /Range | Ward -14(4), New Delhi |
| 5 | Assessment year in respect of which it is proposed to issue notice u/s 148 | 2012-13 |
| 6 | The quantum of income has escaped assessment | Cash deposit of Rs. 51,00,000/- and contract receipt of Rs 14,76,798/- |
| 7 | Whether the provisions of section 147(a), 147(b) or 147(c) are applicable or all the provision to the section are applicable | Clause (b) to explanation 2 to Section 147 of the Act. |
| 8 | Whether the assessment is proposed to be made for the first time, if the reply is in affirmative, please state
i) Whether any voluntary return has already been filed and ii) If so, the date of filing the said return |
Yes
NO No |
| 9 | If the answer to point is in negative, please state
i) The income originally assessed ii) Whether it is a case of under assessment, assessment at too low rate, assessment which has been made the subject to excessive relief or allowing of excessive loss or depreciation |
N.A.
N.A. |
| 10 | Whether the provision of Sec. 150 (1) are applying. If the reply is in the affirmative the relevant facts may be stated against item No. 11 and it may also be brought out that the provisions of section 150(2) would not stand in the way of initiating proceedings u/s 147 | N.A. |
| 11 | Reasons of the belief that income has escaped assessment | The name of the assessee company is appearing in the list of non filers of Income Tax Return (NMS) for the F.Y. 2011-12 relevant to A.Y. 2012-13 and Individual Transaction Statement of assessee showing that the assessee company had deposited Cash of Rs. 51,00,000/- and received contract receipt of Rs.14,76,798/- during the F.Y. 2011-12, therefore the cash deposit of Rs. 51,00,000/- and contract receipt of Rs.14,76,798/- is escaped income of the assessee company during the A.Y. 2012-13. |
| Dated 14.03.2019 | (Karam Chand) Income Tax Officer Ward-14(4), New Delhi |
|
| 12 | Whether the Addl. CIT is satisfied on the reasons recorded by the AO in the case M/s Krish Road Carriers Pvt. Ltd. for A.Y. 2012-13 that it is a fit case for the issue of a notice u/s 148 | [Signature]
(Ved.Prakash Mishra) |
| Whether the Pr. CIT is satisfied on the reasons recorded by the AO in the case of M/s Krish Road Carriers Pvt. Ltd. for A.Y. 2012-13 that it is a fit case for the issue of a notice u/s 148 | Perused reasons recorded by the AO. I am satisfied that this is a fit case for issue of notice u/s 148 of the I.T. Act. Accordingly, approval is accorded.
Pr. Commissioner of Income Tax, |
|
13. We further observed that ld. DR of the Revenue brought to our notice copy of approval which has only initials but contents are the same.
14. We observed that the coordinate Bench in the case of Sanjay Kumar vs. DCIT in ITA No.5765/Del/2025 order dated 08.01.2026 has decided the similar issue and held as under :-
“6. Having heard the respective submissions made on behalf of the parties and having regard to the materials available on record particularly when the satisfaction recorded by the Ld. AO and the approval granted by the Ld. PCIT both found to be undated, relying upon the order of the Coordinate Bench in the case of Sumit Suneja (supra), we hold that such approval has no validity in the eyes of law and therefore, the same is liable to be quashed. Consequently, the assessment proceeding is also vitiated, void ab initio and therefore quashed. Ordered accordingly.”
15. Further, we find force from the decision of the Mumbai Bench in the case of J Kumar Infraprojects Ltd. vs. DCIT (2025) 176 taxmann.com 193 (Mumbai – Trib.) wherein the coordinate Bench has dealt with this issue in detail and decided the issue in favour of the assessee. For the sake of brevity, we reproduce the relevant findings of the aforesaid decision as under :-
“10. We have heard the counsels for both the parties, perused the material placed on record and have gone through the submission filed by the Assessee and the Ld. DR. It is an undisputed fact that the approval accorded u/s.151 of the Act by the appropriate authority is not signed and the said approval is not in paper form but in electronic form. The Approval as per sec.151 of the Act is enclosed in the paper book of the Assessee at pages 114 and 115 and the same is reproduced as under:
……………..
11. It is important to evaluate the provisions of sec.281A of the Income-tax Act, which deals with authentication of notices and other documents issued by the department. The relevant provisions of sec.281A 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).”
12. From the bare reading of the above provisions of sec.282A of the Act, it is clear that sub-section (1) to Sec.282A of the Act 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. Thus, to this extent, the interpretation of the Ld. DR is not correct that the requirement of signature in the notice or document issued is only when the same is issued in paper form.
13. 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.
14. Sec.282A(1) of the Act prior to its substitution by the Finance Act, 2016 w.e.f. 1-6-2016 also required the notice or document issued to be signed. The pre-amended provision of sec.282A(1) of the Act read as under:
“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 in manuscript by that authority.”
15. Therefore, in our view 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 Sec.282A(1) of the Act 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. In this regard reliance is being placed upon the decision of the Hon’ble Allahabad High Court in the case of Daujee Abhushan Bhandar Pvt. Ltd. v. UOI, Writ Tax No.78 of 2022, order dated 10.03.2022 wherein it has held that prior to communicate the notice or document, the same shall be digitally signed before complying with the procedural requirements as per Rule 127A of the Income tax Rules, 1962. The relevant part of the decision is reproduced as under:
“16. Sub Section (1) of Section 149 starts with a prohibitory words that “no notice under Section 148 shall be issued for the relevant Assessment Year after expiry of the period as 27 J Kumar Infraprojects Ltd. provided in sub Clauses (a) (b) and (c)”.There is no dispute that the notice must be issued by the Assessing Authority within the period of limitation as provided in Section 149 of the Act, 1961. Section 282 of the Act, 1961 provides for mode of service of notices. Section 282 A provides for authentication of notices and other documents by signing it. Sub- Section 1 of Section 282 A uses the word “Signed” and “issued in paper form” “or “communicated in electronic form by that authority in accordance with such procedure as may be prescribed”. Thus, signing of notice and issuance or communication thereof have been recognised as different acts.
17. Rule 127 A(1) of the Rules 1962 provides that every notice or other document communicated in electronic form by an authority under the Act shall be deemed to be authenticated in case of electronic mail or electronic mail message (e-mail) if the name and office of such income tax authority is printed on the e-mail body, if the notice or other document is in the e-mail body itself, or is printed on the attachment to the e-mail, if the notice or other document is in the attachment and the e-mail, is issued from the designated e-mail address of such income tax authority. Thus, the issuance of notice and other document would take place when the email is issued from the designated email address of the concerned income tax authority.
18. Since Section 149 of the Act 1961 requires notice to be issued by Income Tax Authority, therefore, in terms of sub Section (1) of Section282 A it has to be signed by that authority and to be issued in paper form or communicated in electronic form by that authority in accordance with procedure prescribed. 19. The communication in electronic form has been prescribed in Rule 127 A of the Rules 1962 which provides a procedure for issuance of every notice or other document and the e-mail in electronic form/electronic mail which has to be issued from the designated e-mail address of such income tax authority.
20. Thus, after digitally signing the notice the income tax authority has to issue it to the assessee either in paper form or through electronic mail. Sub-Section (1) of Section 13 of the Act 2000 provides that dispatch of an electronic record occurs when it enters a computer resource outside the control of the originator. The aforesaid sub Section (1) of Section 13 indicates the point of time of issuance of notice. Therefore, after a notice is digitally signed and when it is entered by the income tax authority in computer resource outside his control i.e. the control of the originator then that point of time would be the time of issuance of notice.”
16. The above decision of the Allahabad High Court in the case of Daujee Abhushan Bhandar (supra) clearly makes distinction between signing of notice and issuance or communication thereof. It is also held that as per the provision of sec.282A(1) of the Act, 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] 448 ITR 1 (All) (HC), it has been held that unsigned approval u/s.151 of the Act 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. The relevant part of the order is reproduced as under:
“16. Sub-section (1) of Section 282A contains the following necessary conditions:
(i) such notice or other document shall be signed by that Authority and
(ii) issued in paper form or communicated in electronic form by that authority
(iii) in accordance with such procedure as may be prescribed.
17. The procedure for communication in electronic form has been prescribed under Rule 127A of the Rules 1962.
18. The first and foremost condition under Section (1) of Section 282A is that notice or other document to be issued by any Income Tax Authority shall be signed by that authority. The word “and” has been used in sub-Section (1),in conjunctive sense meaning thereby that such notice or other document has first to be signed by the authority and thereafter it may be issued either in paper form or may be communicated in electronic form by that authority. In the present set of facts, it is the admitted case of the respondents that the PCIT has not recorded satisfaction under his signature prior to the issuance of notice by the Assessing Officer under Section 148 of the Act, 1961. ………
25. Thus the expression “shall be signed” used in Section 282A(1) of the Act 1961 makes the signing of the notice or other document by that authority a mandatory requirement. It is not a ministerial act or an empty formality which can be dispensed with. “Signed” means to sign one’s name; to signify assent or adhesion to by signing one’s name; to attest by signing or when a person is unable to write his name then affixation of “mark” by such person. The document must be signed or mark must be affixed in such a way as to make it appear that the person signing it or affixing his mark is the author of it. Therefore, a notice or other document as referred in Section 282A (1) of the Act, 1961 will take legal effect only after it is signed by that Income Tax Authority, whether physically or digitally. The usage of the word “shall” make it a mandatory requirement. ……..
28. Section 282A (1) of the Act, 1961 specifically provides that a notice or other documents issued by any Income Tax Authority shall be signed by that authority in accordance with such procedure as may be prescribed. Section151 of the Act, 1961 specifically provides recording of satisfaction by the Prescribed Authority, on the reasons recorded by the Assessing Officer that it is a fit case for the issue of notice under section 148 of the Act, 1961. Unless such satisfaction is recorded, the Assessing Officer could not get jurisdiction to issue notice under section 148. A satisfaction, to be a valid satisfaction under section 151 of the Act, 1961, has to be recorded by the Prescribed Authority under his signature on application mind and not mechanically, as also held by the Hon’ble Supreme Court in the case of Chhugamal Rajpal (supra). Unless the Prescribed Authority under section 151 of the Act, 1961 records his satisfaction on application of mind and under his signature, there cannot be a valid satisfaction empowering the Assessing Officer to assume jurisdiction to issue notice under section 148 of the Act, 1961. In other words, an Assessing Officer may issue jurisdictional notice under Section 148 only after the Prescribed Authority under section 151 of the Act records his satisfaction that it is fit case for issue of notice under section 148.
29. In the present set of facts there was no valid satisfaction recorded by the Prescribed Authority under section 151 of the Act, 1961 when the Assessing Officer issued notice to the assessees under section 148 of the Act, 1961. At the time when the notice under section 148 of the Act, 1961wasissued by the Assessing Officer to the petitioner there was no valid satisfaction recorded by the Prescribed Authority i.e. the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Subsequent to issuance of the notice under section 148 of the Act, 1961 by the Assessing Officer, the satisfaction under section 151 was digitally signed by the Prescribed Authority. Therefore, the point of time when the Assessing Officer issued notices under section 148, he was having no jurisdiction to issue the impugned notices under section 148 of the Act, 1961. Consequently the impugned notices issued by the Assessing Officer under section 148 of the Act, 1961 were without jurisdiction. The questions no. (a) and (b) are answered accordingly.”
17. In the case of Reuters Asia Pacific Ltd. v. Dy. CIT, ITA No.587/Mum/2021, AY 2015-16, Bench ‘I’, order dated 26.12.2023, in the context of validity of unsigned assessment order served on the assessee in that case, the provisions of sec.282A of the Act 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 relevant part of the ITAT order is reproduced hereunder:
“9. Section 282A of the Act deals with authentication of notices and other documents. The section mandates that where the Act requires the notice or other documents to be issued by any Income Tax Authority, such notice or other document signed and issued in paper form or communicated in electronic form by the Authority in accordance with procedure as may be prescribed. Section 282 of the Act specifies the mode of service of notice or summon or requisition or order or any other communication under this Act. A conjoint reading of the above two sections would make it clear that other documents referred to u/s.282A of the Act would include summon or requisition or order or any other communication. Thus, the requirement of section 282A of the Act is that before any notice or order is communicated to the assessee it should be signed in accordance with the prescribed procedure .
10. The assessee has also placed on record Instruction no.1/2018 dated 12/2/2018 with respect to conduct of Assessment proceedings in scrutiny cases through ‘E proceedings’. Therein apart from other procedural aspects, the Board once again specifically mentioned the requirement of digital signatures by the Assessing Officer on orders/notices/communications before they are issued to the assessee.
………
16. The ld. Departmental Representative referred to the provisions of Rule 127A i.e. the Rule framed in pursuance to the provisions of section 282(2) of the Act for service of notice, summons, requisition order and other communications. The ld. Departmental Representative has pointed that since the assessment order communicated to the assessee originated from the designated E-mail ID of the Assessing Officer, therefore, in terms of Rule 127A, the said document shall be deemed to be authenticated. The said argument is desultory and not in unison with the provisions of section 282A of the Act. The relevant provisions of section 282A of the Act are reproduced herein below:
“282A: Authentication of notices and other documents:
(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).”
The aforesaid section is with respect to authentication of notices and other documents i.e. orders/summons/requisitions/communications etc. Subsection (1) makes it obligatory that where any notice or other document is required to be issued under the provisions of the Act, the same shall be signed and issued by the competent authority in accordance with the procedure prescribed. The section is unambiguous, specifies signing of notice or other documents mandatory and the manner of signing procedural. Therefore, the Board has issued instructions from time to time laying down the procedures inter alia for signing of the notices and the assessment orders. Sub-section (2) of section 282A of the Act explains the connotation of expression “authentication”. Thus, signing of document and authentication of document carry different meaning. Signing of document denotes committing to the document, whereas, authentication of document relates to genuineness of origin of document. If signing and authentication would mean the same, then there was no need for the Legislature to lay down the requirement of signing the documents viz, notices, orders etc in sub-section (1) and explain the purpose of authentication in sub-section (2) of section 282A of the Act. If argument of the Revenue is accepted, then the provisions of sub-section (1) to section 282A would become redundant. ……….
19. Ergo, in facts of the case and documents on record, we hold the unsigned impugned assessment order served on the assessee invalid and quash the same.” [Emphasis supplied]
18. On the contrary Ld. DR has placed reliance on the decision of Chattisgarh High Court in the case of Bharat Krishi Kendra v. UOI [2022] 444 ITR 584wherein it is held that in para 14 of the order that unsigned approval granted u/s.151 of the Act could not treated as invalid considering the provision of sec.282A of the Act which provides that notice or other documents to be issued for the purpose of the Act of 1961 by any income-tax authority shall be deemed to be authenticated if name and designation is provided. In approval under Section 151 of the Act of 1961, name, designation and office is printed. Hence, submission of learned counsel for petitioner that approval is not digitally signed is also not sustainable, more so when it bears DIN & Document Number.
19. However, the decision in Bharat Krishi Kendra, supra, does not refer to the provisions of section 282A(1) of the Act which clearly mandates signing the notice or document prior to issue of the same. In fact, sub-section (2) to section 282A of the Act merely authenticates the notice or document issued after the same is signed and both these provisions of sub-section (1) and sub-section (2) of section 282A of the Act has to be read conjointly and not independent of each other else sub-section (1) to section 282A of the Act would become redundant. Further, this decision of Chattisgarh High Court in Bharat Krishi Kendra, supra, is rendered by single judge bench whereas the decisions of Allahabad High Court in the case of Daujee Abhushan Bhandar, supra, and Vikas Gupta, supra, are rendered by division judge bench. Therefore as per judicial discipline the decisions of Division bench has binding precedent as compared to single –judge bench.
20. Even otherwise, there is no decision of jurisdictional High Court on the issue at hand and thus, if there are divergent views of non-jurisdictional High Courts on the subject, the view that favour the Assessee needs to be adopted as held by the Hon’ble Supreme Court in CIT v. Vegetable Products Ltd.[1973] 88 ITR 192 (SC)wherein it is held that if the language is capable of more than one meaning, the Court needs to adopt the interpretation that favours the Assessee needs to be adopted.
21. In view of the above, it is held that the sanction granted u/s.151 of the Act without signing the same is invalid and therefore the Assessing Officer did not assumed jurisdiction to issue notice u/s.148 of the Act. Hence, the notice issued u/s.148 of the Act is held to be bad in law for want of valid assumption of jurisdiction and is hereby quashed. Consequently, the order passed u/s.143(3) r.w.s. 147 of the Act dated 31.03.2024 for AY 2016-17 is bad in law and quashed.
22. The additional ground of appeal of the Assessee on the issue of validity of unsigned sanction issued u/s.151 of the Act is allowed.”
16. Respectfully following the aforesaid decision, we hold that the sanction granted u/s.151 of the Act without signing the same is invalid and being undated, and therefore, the Assessing Officer did not assume jurisdiction to issue notice u/s.148 of the Act. It is noted that ld. DR submitted a copy of approval which was found to be signed by the authority. What is relevant is the copy shared with the assessee not what is presumed to be kept in the assessment file. Hence, the notice issued u/s.148 of the Act is held to be bad in law for want of valid assumption of jurisdiction and is hereby quashed. Consequently, the assessment order passed u/s.143(3) r.w.s. 147 of the Act for AY 2012-13 is bad in law and quashed.
17. Since the ground on jurisdictional issue is allowed, the other grounds raised by the assessee are not adjudicated upon and the same are kept open.
18. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on this 2nd day of September, 2026.
