The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the assessment order under Section 153 of the Income Tax Act due to the delayed digital sign of the National Faceless Assessment Centre ( NFAC ) beyond the statutory deadline.
Bennett Coleman & Co. Ltd. (Appellant) challenged the validity of the assessment order claiming that it was signed after the limitation period prescribed under Section 153 of the Income Tax Act, making it invalid.
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The revenue’s counsel argued that the assessment order was completed within the statutory deadline on September 28, 2021, and that the delay in applying the digital signature was due to technical issues.
The revenue’s counsel relied on the Deputy Commissioner of Income Tax (DCIT)’s report, which provided evidence that the order had been generated on time, and asserted that the technical delay should not invalidate the assessment.
The two-member bench comprising Narendra Kumar Billaiya (Accountant Member) and Rahul Chaudhary (Judicial Member) observed that the digital signature on the assessment order, signed by Visesh Prakash, was dated October 1, 2021, and the accompanying tax computation sheet was also signed on the same date.
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Since the assessment order was not digitally signed by the statutory deadline of September 30, 2021, it was considered incomplete.
The tribunal referred to the Supreme Court’s ruling in the case of Kalyankumar Ray vs. Commissioner of Income Tax which held that for an assessment to be valid, there must be some writing or documentation initialed or signed by the Income Tax Officer ITO) within the prescribed limitation period. This signature or initial marks the finality of the assessment.
The Court further stated that while the tax computation may be completed later, it is essential that the core assessment, including the determination of tax payable, must be formalized before the limitation period expires.
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In light of the Supreme Court ruling, the tribunal emphasized that signing the assessment order is a mandatory requirement. Without a valid signature by the deadline, the assessment order is incomplete and invalid.
Thus, the tribunal ruled in favor of the assessee concluding that the assessment order was barred by limitation as it was not signed within the required period. The assessee’s appeal was allowed.
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