ACIT CIRCLE 32(1), MUMBAI V. VAIBHAV PANKAJ SHAH, MUMBAI

MA 107/MUM/2025

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The case revolves around a dispute concerning a penalty order under section 271(1)(c) of the Income Tax Act, 1961, imposed on the assessee, Vaibhav Pankaj Shah, for the assessment year 2013-14. The revenue contended that the penalty was correctly imposed following the approval from the Joint Commissioner of Income Tax (JCIT) dated 17/03/2020. However, the assessee argued that the penalty was imposed before the receipt of the JCIT's approval, which was actually dated 18/03/2020, thus rendering the penalty order invalid. The Tribunal examined the documents and approvals presented by both parties and referenced decisions from the High Courts of Allahabad and Bombay, which underscored the importance of signed and properly dated documents in the legal process.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705793 (ITAT-MUMBAI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2013-2014
• Other Referred Cases: Vikas Gupta vs. Union of India [2022] 142 taxmann.com 253 (Allahabad), Prakash Krishnavtar Bharadwaj in W. P. No. 9835 of 2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA KAUSHIK; DR
• Assessee Lawyers: DEVENDRA JAIN; AR
• Keywords: Set aside
• Section: 148; 271(1)(c)

Judgement Text

" | आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE JUSTICE (RETD.) C. V. BHADANG, HON’BLE PRESIDENT & SHRI N. K. BILLAIYA, HON’BLE ACCOUNTANT MEMBER M.A. No. 107/Mum/2025 A/o I.T.A. No. 1022/Mum/2024 Assessment Year: 2013-14 ACIT, Circle – 32(1), Mumbai Vs Vaibhav Pankaj Shah 60-B, Dolat Bunglow East West Road No. 2 Vile Parle (W0 Mumbai - 400049 [PAN: AALPS8652B] अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Devendra Jain, A/R Revenue by : Ms. Kavita Kaushik, Sr. D/R सुनवाई की तारीख/Date of Hearing : 27/06/2025 घोषणा की तारीख/Date of Pronouncement : 30/06/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM : This miscellaneous application filed by the revenue is directed towards the order of the Tribunal in ITA No. 1022/Mum/2024 dated 20/06/2024 pertaining to AY 2013-14. 2. The revenue has pointed out the following which needs rectification u/s 254(2) of the Act:- “ The assessee preferred appeal to Hon'ble ITAT against the penalty order dated 17.03.2020 u/s 271(1)(c) of Rs. 540750/- On perusal of the same, it can be seen that said penalty was levied after receiving approval of Jt.CIT-25(3) for imposition of penalty vide DIN No. ITBA/PNL/S/992/2019-20/1026706868(1) dated 17.03.2020. The case history noting as seen in ITBA along with the penalty order and approval are attached as Annexure 1 for your kind reference. Subsequently, approval of Jt.CIT-25(3) dated 18.03.2020 for imposition of penalty also was issued, on which no further action has been taken in view of action of imposing penalty was already taken in consequent to the receipt of JCIT's approval dated 17.03.2020 for imposing penalty. The case history noting as seen in ITBA are attached fer your kind reference as Annexure 2. It is requested that the fact that there M.A. No. 107/Mum/2025 2 is no penalty order issued in this case i.e., against approval issued on 18.03.2020 be taken on record. However, the assessee filed appeal before the Hon'ble ITAT against penalty order u/s 271(1)(c) dated 17.03.2020 stating that the AO has passed the penalty order before the receipt of approval from JCIT and accordingly contended that the penalty order is liable to be quashed relying on the receipt of later JCIT's approval dated 18.03.2020 for imposing penalty instead of JCIT's approval dated 17.03.2020 for the penalty order u/s 271(1)(c) in question. Therefore, it is clear from the facts being placed before the Hon'ble bench that 271(1)(c) order was issued after approval from Range head on same day, while assessee has presented an approval dated 18.03.2020 against which no order was passed. This fact is evident from the screenshot of Common Functionalities Module of ITBA in the case of assessee with respect to penalty reflecting the document generated with date and DIN No. showing that no document relating to penalty order u/s 271(1)(c) generated after the receipt of penalty order approval dated 18.03.2020.The screenshot of the same is attached as Annexure 3 for your reference. Further the Ld.CIT(A) has considered the same ground and ruled in favour of revenue as seen in para 10 of Ld.CIT(A) order u/s 250 dated 29.01.2024. In view of the above, it is humbly prayed before Hon'ble ITAT that the earlier order in ITA NO. 1022/Mum/2024 dated 20.06.2024 for A.Y. 2013-14 may kindly be recalled It is further prayed that, in light of the above facts, the appeal may be adjudicated on merits.” 3. Representatives were heard at length. We have carefully perused the impugned order of the Tribunal along with the order-sheet details furnished by the ld. D/R. 4. Firstly, we have to state that the revenue did not furnish any screenshot of the approval granted by the JCIT – 25(3), Mumbai dated 16/03/2020. The documents submitted by the ld. D/R showing approval was granted on 17/03/2020, are unsigned and, therefore, the same is not accepted in light of the decision of the Hon’ble High Court of Allahabad in the case of Vikas Gupta vs. Union of India [2022] 142 taxmann.com 253 (Allahabad) wherein the Hon’ble High Court was interalia seized with the question relating to the notice or other documents were first to be signed by the Authority and thereafter it M.A. No. 107/Mum/2025 3 may be issued either in paper form or may be communicated in electronic form by the Authority. The Hon’ble High Court held as under:- “27. The first and foremost condition under sub-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. 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. Section 151 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 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, 1961was issued 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.” M.A. No. 107/Mum/2025 4 4.1. Further the Hon’ble High Court of Bombay in the case of Prakash Krishnavtar Bharadwaj in W. P. No. 9835 of 2022, order dated 09/01/2023, was seized with a similar situation and held as under:- “21. We are, therefore, of the considered opinion that in the present case, the notice u/s.148 dated 02.04.2022 having no signature affixed on it, digitally or manually, the same is invalid and would not vest the Assessing Officer with any further jurisdiction to proceed to reassess the income of the petitioner. Consequently, the notice dated 02.04.2022 u/s.148 of the Act issued to the petitioner being invalid and sought to be issued after three years from the end of the relevant assessment year 2015-16 with which we are concerned in this petition, any steps taken by the respondents in furtherance of notice dated 21.03.2022 issued under clause (b) of section 148A of the Act and order dated 02.04.2022 issued under clause (d) of section 148A of the Act, would be without jurisdiction, and therefore, arbitrary and contrary to Article 14 of the Constitution of India. Consequently, we quash and set aside the notice dated 02.04.2022 issued by the respondents u/s.148 of the Act, order dated 02.04.2022 under clause (b) of section 148A of the Act and notice dated 21.03.2022 issued under clause (b) of section 148A of the Act.” 4.2. The facts before us are identical to the facts considered by the Hon’ble High Court (supra). Since no valid approval dated 17/03/2020 has been brought to our notice, we do not find any merit in this miscellaneous application by the revenue and the same is accordingly dismissed. 5. In the result, miscellaneous application filed by the revenue is dismissed. Order pronounced in the Court on 30th June, 2025 at Mumbai. Sd/- Sd/- [Justice (Retd.) C. V. Bhadang] [Narendra Kumar Billaiya] President Accountant Member Mumbai, Dated 30/06/2025 * * * *SC SrPs SC SrPs SC SrPs SC SrPs M.A. No. 107/Mum/2025 5 आदेश की \u0015ितिलिप अ\u001aेिषत /Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. \u0015 थ / The Respondent 3. संबंिधत आयकर आयु\" / Concerned Pr. CIT 4. आयकर आयु\" ) अपील ( / The CIT(A)- 5. िवभागीय \u0015ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "