Income Tax Notice issued u/s 148 Invalid Without Signature: Karnataka HC dismisses Revenue's Appeal [Read Order]

The Karnataka High Court has dismissed an appeal filed by the Revenue, upholding an Income Tax Appellate Tribunal (ITAT) order that quashed a reassessment proceeding.

The Court rejected the Revenue's reliance on Section 282A of the Act, clarifying that it does not dispense with the requirement of a signature.

The appeal was filed by the Revenue against the ITAT's order in favour of M/s Yeshoda Electricals for Assessment Year 2007-08. The dispute arose after the Assessing Officer issued a notice under Section 148 of the Income Tax Act to reopen the assessment. The notice was subsequently found to be unsigned. While the first appellate authority validated the notice, the ITAT held that the lack of a signature was a fatal flaw, rendering the entire reassessment order invalid.

Counsel for the Revenue argued that the unsigned notice was a curable defect and that the assessee's failure to object immediately should validate the proceedings. Per contra, the assessee's counsel contended that a signature is a mandatory requirement for a valid jurisdictional notice, and its absence cannot be cured by the assessee's conduct or subsequent events.

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The Revenue has placed reliance on the judgment of the Delhi High Court in Sky Light Hospitality LLP v. Assistant Commissioner of Income Tax, [(2018), to contend that defects in a notice arising from human errors or mistakes cannot invalidate proceedings which are otherwise valid. However, the factual position before the Delhi High Court is not identical to the facts of the present case. Accordingly, the said judgment offers no assistance to the Revenue.

A division bench comprising Justice S.G. Pandit and Justice K.V. Aravind held that a notice under Section 148 is a jurisdictional notice, and any foundational defect, such as the absence of the Assessing Officer's signature, is a serious defect that renders the notice invalid.

The Court rejected the Revenue's reliance on Section 282A of the Act, clarifying that it does not dispense with the requirement of a signature. The bench found that the judgments relied upon by the Revenue from other High Courts were distinguishable on facts.

The Court on finding that the ITAT was justified in declaring the reassessment void ab initio, dismissed the Revenue's appeal and answered the substantial questions of law in favour of the assessee.

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