Case Note & Summary
The petitioner, Prakash Krishnavtar Bhardwaj, a non-resident Indian residing in Dubai, UAE, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging the reassessment proceedings initiated against him for the assessment year 2015-16. The petitioner had not filed his return of income for that year as his total income was below the taxable limit. On 21 March 2022, the Income Tax Officer, Ward 2(1) (Respondent No.1) issued a notice under Section 148A(b) of the Income Tax Act, 1961, alleging that income chargeable to tax had escaped assessment. The petitioner responded electronically on 28 March 2022. Thereafter, on 2 April 2022, the Assessing Officer passed an order under Section 148A(d) and issued a notice under Section 148 of the Act. The petitioner contended that the Section 148 notice was unsigned and was never received by him via email; he received a copy only by speed post on 16 April 2022. The petitioner argued that an unsigned notice is invalid in law and that since three years had elapsed from the end of the assessment year 2015-16, the proceedings were barred by limitation under Section 149(1)(b) of the Act. The respondents argued that the notice was validly issued and served. The court examined the provisions of Section 148 and the requirement of signing. It held that a notice under Section 148 must be signed by the Assessing Officer to be valid; an unsigned notice is not a notice in the eyes of law and cannot confer jurisdiction. Consequently, the reassessment proceedings were invalid and time-barred. The court quashed the impugned notice under Section 148A(b), the order under Section 148A(d), and the notice under Section 148, all dated 2 April 2022, and allowed the writ petition.
Headnote
A) Income Tax - Reassessment - Validity of Notice - Section 148, Income Tax Act, 1961 - Unsigned Notice - The court held that a notice under Section 148 which is unsigned is not a notice in the eyes of law and is invalid ab initio. The requirement of signing is mandatory and cannot be dispensed with. (Paras 7-10) B) Income Tax - Reassessment - Limitation - Section 149(1)(b), Income Tax Act, 1961 - Time Barred - Since the unsigned notice under Section 148 was invalid and never validly issued, the reassessment proceedings for Assessment Year 2015-16 were beyond the period of three years from the end of the relevant assessment year, and thus barred by limitation. (Paras 11-12) C) Income Tax - Reassessment - Service of Notice - Section 148, Income Tax Act, 1961 - Mandatory Service - The court emphasized that service of a valid notice under Section 148 is a condition precedent for initiating reassessment proceedings. An unsigned notice cannot be served and does not confer jurisdiction on the Assessing Officer. (Paras 7-10)
Issue of Consideration
Whether an unsigned notice under Section 148 of the Income Tax Act, 1961 can be considered a valid notice in the eyes of law, and whether the reassessment proceedings are barred by limitation under Section 149(1)(b) of the Act.
Final Decision
The court allowed the writ petition, quashing the impugned notice under Section 148A(b) dated 21.03.2022, order under Section 148A(d) dated 02.04.2022, and notice under Section 148 dated 02.04.2022.
Law Points
- Unsigned notice is invalid
- Notice must be signed to be valid
- Limitation period under Section 149(1)(b) cannot be extended by invalid notice
- Service of notice mandatory
