2025 (5) TMI 204 - AT - Income Tax

Validity of assessment order in terms of provisions of section 144C (1) - Validity of the Directions issued by the Dispute Resolution Panel - HELD THAT - The order passed by the AO pursuant to the directions given by the DRP is without signature of the concerned AO which itself is not maintainable as the same is nullity and invalid. This issue has already been decided by the coordinate bench of the Tribunal relied upon by assessee before us in the case of Reuters Asia Pacific Ltd 2024 (5) TMI 386 - ITAT MUMBAI wherein the Tribunal has mentioned that signing of an assessment order by the AO is a mandatory requirement and not merely a procedural formality and it is not a curable procedural defect which can be fixed by signing of order after service of same on the assessee. We allow the issue raised by the assessee in additional ground holding that the assessment order framed by the AO giving effect to the directions of the DRP is not maintainable as the assessment order is not authenticated by the concerned authority with his signature. In our opinion the said order unsigned order is invalid and is hereby quashed. Consequently the appeal of the assessee is allowed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Tribunal in this appeal are:

(a) Whether the directions issued by the Dispute Resolution Panel (DRP) are valid and in conformity with the guidelines issued by the Central Board of Direct Taxes (CBDT) Circular No. 19/2019 dated 14 August 2019;

(b) Whether the final assessment order passed under Section 143(3) read with Section 144C(13) of the Income-tax Act, 1961 (the Act) is valid and sustainable, particularly in light of the absence of the signature of the concerned Assessing Officer on the order;

(c) Whether the procedural requirements under Section 282A of the Act regarding signing and authentication of notices and orders have been complied with;

(d) Whether the non-signing of the assessment order can be cured under Section 292B of the Act;

(e) Ancillary issues relating to the applicability of precedents on the validity of unsigned assessment orders.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Validity of Directions issued by the Dispute Resolution Panel (DRP)

Legal Framework and Precedents: The DRP issues directions under Section 144C of the Act to resolve disputes arising from assessments. The CBDT Circular No. 19/2019 provides guidelines on the functioning of DRPs and the manner in which directions are to be issued.

Court's Interpretation and Reasoning: The assessee contended that the DRP's directions dated 14 November 2022 violated the CBDT Circular No. 19/2019 and hence were invalid. However, the Tribunal did not delve into the merits of this contention, as it was rendered academic by the subsequent findings on the validity of the assessment order itself. The Tribunal noted that since relief was granted on the ground of non-signature of the assessment order, the challenge to the DRP directions was not decided.

Application of Law to Facts: The Tribunal acknowledged the submission of the assessee but refrained from deciding on the validity of the DRP directions, deferring it as academic due to the final outcome on other grounds.

Issue (b): Validity of the Final Assessment Order and Requirement of Signature

Legal Framework and Precedents: Section 143(3) read with Section 144C(13) empowers the Assessing Officer to finalize assessment orders in accordance with DRP directions. Section 282A of the Act mandates that all notices and orders issued by income-tax authorities must be signed by the concerned authority. The Tribunal relied heavily on the precedent set by a coordinate bench in the case of Reuters Asia Pacific Ltd., where it was held that signing of an assessment order is a mandatory legal requirement and not a mere procedural formality. The Tribunal also referred to the decision in Vijay Corporation which held that non-signing of an assessment order renders it invalid and cannot be cured under Section 292B.

Court's Interpretation and Reasoning: The Tribunal observed that the assessment order under challenge was not signed by the Assessing Officer. This omission was held to be fatal and rendered the order a nullity. The Tribunal emphasized the distinction between 'signing' and 'authentication' under Section 282A, noting that authentication (such as an email originating from a designated officer's email ID) does not substitute for the mandatory signing of the order. The Tribunal rejected the Revenue's argument that Rule 127A or Section 282A(2) could deem the unsigned order as authenticated.

The Tribunal further held that Section 292B, which cures procedural defects, does not apply to the fundamental defect of non-signing of an assessment order. The date of signing is the date of the order, and an unsigned order lacks jurisdiction and is invalid.

Key Evidence and Findings: The assessment order was served on the assessee without the signature of the Assessing Officer. The Tribunal relied on the text of Section 282A, the CBDT instructions, and the coordinate bench judgments to conclude that the order was invalid.

Application of Law to Facts: The Tribunal applied the statutory provisions and binding precedents to the facts, concluding that the unsigned assessment order was invalid and liable to be quashed.

Treatment of Competing Arguments: The Revenue argued that the order was authenticated by virtue of originating from the designated officer's email and that procedural defects could be cured under Section 292B. The Tribunal rejected these arguments as inconsistent with the statutory scheme and judicial precedent.

Conclusions: The Tribunal held the unsigned assessment order to be invalid and quashed it accordingly.

Issue (c): Applicability of Section 282A and Distinction Between Signing and Authentication

Legal Framework: Section 282A(1) mandates that notices and documents must be signed by the competent authority. Section 282A(2) provides for authentication by printing or stamping the name and office of a designated income-tax authority. The Tribunal analyzed these provisions to clarify that signing and authentication are distinct concepts.

Court's Reasoning: Signing denotes the authority's commitment to the document, while authentication relates to its genuineness of origin. The Tribunal held that if signing and authentication were synonymous, the legislature would not have separately mandated signing in subsection (1) and authentication in subsection (2). Therefore, the absence of signature cannot be remedied by mere authentication.

Application: The unsigned order lacked the mandatory signature and hence was invalid despite being authenticated by email origin.

Issue (d): Whether Non-Signing Can Be Cured Under Section 292B

Legal Framework: Section 292B allows the Income Tax Department to rectify procedural defects or omissions in notices or orders.

Court's Interpretation: The Tribunal held that non-signing is not a procedural defect but a substantive legal requirement. Therefore, Section 292B cannot be invoked to cure non-signing. The date of the order is the date it is signed, and an unsigned order is without jurisdiction and void.

Issue (e): Applicability of Precedents

The Tribunal relied on coordinate bench decisions, particularly Reuters Asia Pacific Ltd. and Vijay Corporation, which uniformly held that an unsigned assessment order is invalid and non-curable under Section 292B. These precedents were binding and dispositive on the issue.

3. SIGNIFICANT HOLDINGS

"Signing of an assessment order by the Assessing Officer is a mandatory requirement and not merely a procedural formality and it is not a curable procedural defect which can be fixed by signing of order after service of same on the assessee."

"Section 282A(1) of the Act 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."

"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."

"Non-signing of an assessment order is not a procedural flaw that can be cured subsequently under section 292B. The order is complete only when it is signed and released. The date on which the order is signed by the Assessing Officer is the date of order. An unsigned order is without jurisdiction."

"In the facts of the case and documents on record, we hold the unsigned impugned assessment order served on the assessee invalid and quash the same."

Core principles established include the mandatory nature of signature on assessment orders, the distinction between signing and authentication, the non-applicability of Section 292B for curing non-signature, and the invalidity of unsigned assessment orders.

Final determination: The appeal was allowed on the ground of non-signature rendering the assessment order invalid and quashed. Other grounds raised by the assessee were rendered academic and not decided.