RAGHUVIR RETAILERS PVT. LTD.,KOLKATA V. PCIT-2, KOLKATA

ITA 919/KOL/2024

AI Insights

The case involves Raghuvir Retailers Pvt. Ltd., which appealed against the revisionary order passed by the Pr. Commissioner of Income, Kolkata-2 under section 263 of the Income-tax Act, 1961 for the assessment year 2013-14. The revision was based on an alleged underassessment of income following an initial assessment under section 147, which was itself contested due to the issuance of an unsigned notice under section 148. The Tribunal examined the validity of both the initial assessment and the subsequent revisionary order, ultimately finding both to be procedurally flawed due to the lack of a valid notice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471004 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Other Referred Cases: Keshab Narayan Banerjee Vs. CIT, M/s Classic Flour & Food Processing Pvt. Ltd. Vs. CIT, Kolkata, Concord Infra Projects Pvt. Ltd. Vs. PCIT, Prakash Krishnavtar Bhardwaj Vs. ITO, PCIT Vs. Kesoram Industries Ltd., Manoj Jain, Kolkata vs I.T.O., Sky Light Hospitality LLP v. Assistant Commissioner of Income-Tax, B.K. Gooyee v. Commissioner of Income-tax, Umashankar Mishra v. Commissioner of Income-tax, M/s Westlife Development Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHENDU DATTA
• Assessee Lawyers: S.M. SURANA; FURNISHING EVIDENCESDETAILS
• Keywords: Set aside; Invalid notice; Reassessment proceedings; Question of law; Depreciation; Income from undisclosed sources; Reopening of assessment; Reason to believe; Rule 8D; Revision of order; Borrowed satisfaction; Bogus
• Section: 147; 148; 143(3); 142(1); 263; 13; 69A; 14A; 207

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.919/KOL/2024 (Assessment Year:2013-14) Raghuvir Retailers Pvt. Ltd. Mandawa Shikhar, 151, Sarat Bose Road, Kolkata-700026, West Bengal Vs. PCIT-2 Aaykar Bhavan P-7, Chowringhee Square, Kolkata- 700069, West Bengal (Appellant) (Respondent) PAN No. AAECR8231M Assessee by : Shri S.M. Surana, AR Revenue by : Shri Subhendu Datta, DR Date of hearing: 19.12.2024 Date of pronouncement : 11.02.2024 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Pr. Commissioner of Income, Kolkata-2 (hereinafter referred to as the “PCIT)”] dated 21.03.2024 for the AY 2013-14. 02. The assessee has challenged the revisionary order passed u/s 263 of the Income-tax Act, 1961 (the Act) by PCIT to be invalid and nullity on the ground that the same is consequential proceeding to an invalid assessment framed u/s 147 of the Act on the basis of invalid notice issued u/s 148 of the Act by ITO, Ward-6, Kolkata. 03. The facts in brief are that the return of income was filed on 28.09.2013, declaring a loss of ₹5,144/- which was duly processed on 02.03.2024. Subsequently, after receiving information from DDIT (Investigation), Unit-4(2), Kolkata alleging that assessee has received ₹2,01,87,000/- from M/s Sheetal Steel (Prop. Shri Pulak Saha) Page | 2 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 through various intermediary shell companies. The case of the assessee was accordingly reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 28.03.2020, which was duly served on the assessee and assessee complied with the same by filing return of income on 28.11.2020, declaring loss of ₹5,144/-. The ld. AO accordingly called for the information/ details from the assessee which were complied with by the assessee by furnishing evidences/details. The ld. AO thereafter taking into account the submissions/ contentions/ evidences filed by the assessee made an addition of ₹50,55,000/- as unexplained money u/s 69A of the Act in the assessment framed u/s 147 of the Act dated 28.09.2021, received from two parties i.e. M/s Dhanlaxmi Trading Company & M/s City Sarees. 04. The ld. PCIT thereafter on perusal of the assessment order noted that the assessment u/s 147 of the Act was based on the information that assessee has received money from different sources namely M/s Sheetal Steel of ₹2,01,87,000/-, Dhanlaxmi Trading Co. of ₹27,00,000/-, City Sarees of ₹23,55,000/- aggregating to ₹2,52,42,000/-. According to PCIT, the ld. AO on the basis of partial documents furnished by the assessee, added only ₹50,55,000/- u/s 69A of the Act to the income of the assessee instead of Rs. 2,52,42,000/- and calculated the taxes accordingly. Therefore, the amount received from M/s Sheetal Steel amounting to ₹2,01,87,000/- was not added back, whereas the said amount was clearly mentioned by the ld. AO in Para 2 of page no.2 that income has escaped to that extent. According to PCIT, this has resulted in under assessment of income to the tune of ₹2,01,87,000/- and loss of revenue to the tune of ₹1,32,30,337/-, rendering the assessment framed u/s 147 of the Act, as erroneous and prejudicial to the interest of the Revenue. Page | 3 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 Accordingly, notice u/s 263 of the Act was issued on 08.01.2024, which were not complied with by the assessee. Thereafter the PCIT has treated the assessment order as erroneous and prejudicial to the interest of the revenue due to under assessment of income of ₹2,01,87,000/- and accordingly, cancelled the assessment order by directing the ld. AO to modify the assessment order and tax the amount of ₹2,01,87,000/- after offering a reasonable opportunity of hearing to the assessee. 05. The ld. AR vehemently submitted before the Bench that the assessment framed u/s 147 of the Act vide order dated 28.09.2021, is invalid and ex-facie, nullity in the eyes of law on several scores and therefore, the consequential revisionary proceeding initiated by the ld. PCIT is also invalid and bad in law. In defense of his arguments, the ld. AR stated that the consequential proceedings would be invalid and the assessee can challenge the validity of the assessment framed in the co-lateral/consequential proceedings. The ld. AR in defense of his arguments relied on the decision of Hon'ble Calcutta High Court in case of Keshab Narayan Banerjee Vs. CIT [1999] 238 ITR 694 (Calcutta)/[1999] 156 CTR 109 (Calcutta) and M/s Classic Flour & Food Processing Pvt. Ltd. Vs. CIT, Kolkata in ITA no. 764 to 766/KOL/2024 vide order dated 05.04.2017, Concord Infra Projects Pvt. Ld. Vs. PCIT in ITA No. 174/KOL/2021 vide order dated 13.10.2024. The ld. AR therefore prayed that the assessee is within its legitimate and lawful right to challenge the assessment framed u/s 147 of the Act even in the collateral proceeding as has been held in the aforesaid decisions. Page | 4 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 06. The ld. AR further submitted that the assessment framed u/s 147 of the Act is invalid, nullity in the eyes of law and ex-facie unsustainable on several counts; i. The ld. AR, by referring to the notice u/s 148 of the Act dated 20.03.2020, a copy of which is available at page no.9 of the Paper Book, submitted that the same is without signature of the Asima Mondal, Kolkata, which was not signed or digitally signed and therefore, when the said notice is unsigned, is bad in law. Thus there is no service of valid notice on the assessee. In defense of his argument, the ld. AR relied on the decision of Prakash Krishnavtar Bhardwaj Vs. ITO, in WP 9835 of 2022, order dated 09.01.2023 (Bom), PCIT Vs. Kesoram Industries Ltd. [2020] 423 ITR 180 (Calcutta) vide order dated 2nd August, 2019,Manoj Jain, Kolkata vs I.T.O. vide order dated 11 .07.2024.The ld. AR therefore prayed that on the ground of notice issued u/s 148 of the Act being unsigned either manually or digitally, rendering the said notice as invalid and so is the assessment framed u/s 147 of the Act. ii. Second limb of argument is that at page no.2 of the revisionary order, the ld. PCIT has noted that the order passed u/s 147 of the Act dated 28.09.2021, by the ld. AO was erroneous and prejudicial to the interest of the Revenue and accordingly, issued notice u/s 263 of the Act on 08.01.2024, fixing the hearing on 17.01.2024.The ld. PCIT further stated that the notice was served upon on 08.01.2024 and none appeared for hearing on 17.01.2024, and also on the next date 09.02.2024 and till date. The ld. Page | 5 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 AR, while inviting the attention of the Bench to page no.31 of the Paper Book, which is a revenue proceeding response acknowledgement, submitted that it testified that the assessee has filed reply before the ld. PCIT on 25.01.2024, along with attachment and similarly, on page no.43 of the Paper Book, the assessee attached another acknowledgement e-proceeding acknowledgement dated 08.02.2024, which also testified that the assessee uploaded the reply along with the attachments. The ld. AR therefore, prayed that in view of the Hon'ble Apex Court, the decision in the case of ACIT Vs Marico Ltd SLP (Civil) Diary No. 7367/2020( arising out of order dated 21.08.2019 in WP No. 1917/2019 by Bombay High Court), if the department has not considered the reply of the assessee despite being filed by the assessee, then it would be presumed that Revenue has accepted the reply of the assessee. The ld AR therefore argued that the very basis of revisionary order is bad rendering the revisionary action u/s 263 as invalid. iii. Arguing on the third proposition, the ld. Counsel for the assessee ,by referring to reasons recorded u/s 148(2) of the Act copy of which is available at page no. 12 of the Paper Book, stated that the ld. AO has mentioned in the reasons that assessee is beneficiary of ₹2,01,87,000/- and accordingly, the assessment has escaped within the meaning of Section 147 of the Act. The ld. AR thereafter referred to the reply filed by the assessee before the ld. AO dated 16.09.2021, as evidenced from the e-proceedings response acknowledgement dated 16.09.2021, a copy of Page | 6 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 which is available at page no.27 of the paper book and only thereafter accepted the transactions of loan of ₹2,01,87,000/- and thus it has presumed that the ld. AO has applied his mind to the explanation given by the assessee corroborated by the accompanied evidences. In defense of his argument the ld. AR relied on the order of Keshab Narayan Banerjee (supra). The ld. AR therefore, submitted that even on this count invoking the jurisdiction u/s 263 of the Act is invalid and bad in law. 07. The ld. DR on the other hand, relied on the order passed by ld. PCIT by stating that the notice u/s 148 of the Act sent through e-mail is not required to be signed by the ITO and therefore, the assessment cannot be termed as invalid and nullity on the basis of unsigned notice. So far as other contentions of the assessee are concerned, the ld. CIT DR fairly relied on the order of PCIT. 08. After hearing the rival contentions and perusing the materials available on record, we are of the considered opinion that the assessee has a legitimate right to challenge the validity of the assessment framed u/s 147 of the Act even in the consequential and collateral proceedings. In the present case, the assessee has challenged the revisionary order passed by the ld. PCIT to be invalid and bad in law on the ground that it being consequential to the assessment framed u/s 147 of the Act dated 28.09.2021, which is itself nullity and bad in law on the ground that the unsigned notice issued u/s 148 of the Act, a copy of which is available at page no.9 of the Paper Book, is not signed either manually or digitally and therefore, notice without the signature of the ld. AO is invalid and so is the consequential assessment framed by the ld. Assessing Officer. Page | 7 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 09. We have examined the copy of the notice available at page no.9 of the Paper Book from which it is apparent that the notice was issued without signature of the ld. AO either manually or digitally therefore, the notice is invalid and so is the assessment framed u/s 147 of the Act. The notice was unsigned both manually and digitally is invalid. The issue is covered by the decision of Bombay High Court in the case of Prakash Krishnavatar Bhardwaj in W.P. No. 9835 of 2022 dated 9.1.2023 wherein the Hon’ble High Court has held as under: “8. We have heard the learned counsel for the parties and perused the record of the petition. 9. It is the submission of the learned counsel for the petitioner that on perusal of the affidavit-in-reply of the respondents, there appears to be no categorical denial to the statements made by the petitioner that he has not received an order dated 02.04.2022 passed under clause (d) of Section 148A of the Act, rejecting the petitioner’s submission and holding the petitioner’s case to be one fit for issuing notice u/s.148 of the Act. Similarly, there is no substantial denial to the fact that the notice issued u/ s.148 dated 02.04.2022 was unsigned both digitally and manually and was never received by the petitioner by e-mail or for that matter even uploaded onto the system via e-mail. Further, a copy of the said unsigned notice was received by the petitioner by speed post only on 16.04.2022. 10. It is, therefore, the contention of the petitioner that the notice u/s.148 being an unsigned notice, the same is invalid and consequently proceeding on the basis of an invalid notice vitiates the entire reassessment proceedings as the same is without any jurisdiction. It is further the argument of learned counsel for the petitioner that proceeding on the basisof an invalid notice, which in any case, has been issued after three years from the end of the relevant assessment year, as required under the provisions of section 149(1)(b) of the Act, constitutes a jurisdictional error on the part of the respondents. 11. Learned counsel for the petitioner makes a reference to a Division Bench judgment of the High Court of Calcutta in Commissioner of IncomeTax v. Aparna Agency (P.) Ltd.1 to contend that the provisions of section 192(B) of the Act do not provide for a cure when the notice under the Act is invalid by virtue of it not having a signature affixed as is required under the relevant provisions. He further refers to another judgment of the High Court of Calcutta in B.K. Gooyee v. Commissioner of Income-tax2 and a judgment of a Division Bench of the Madhya Pradesh High Court in Umashankar Mishra v. Commissioner of Income-tax3 for the proposition that absence of a signature on notice is an invalid notice in the eyes of law and such an infirmity amounts to no notice at all. 12. Per contra, Mr. Ajeet Manwani, learned counsel for the respondents submits that assuming the notice u/s.148 of the Act was unsigned manually or digitally as is clear from the original record, this fact would not, by itself vitiate further proceedings in the matter, as according to him, provisions of Section 292B of the Act could cure this defect or mistake. He argues that applying the provisions of section 292B of the Act, the notice which is mistakenly not signed, would not be vitiated; since in any event the unsigned notice, at a later point of time, was sent to the petitioner by courier. 13. Learned counsel for the respondents refers to a judgment of the Delhi High Court in Sky Light Hospitality LLP v. Assistant Commissioner of Income-Tax4 and that of the Calcutta High Court in Commissioner of Income-Tax v. Anand And Co.5 in aid of his argument that even if the signatures were not applied on the notice, the authenticity of the notice was not denied; he argues that if the petitioner does not deny the authenticity of the notice, he has waived his right to raise an objection to its validity. Page | 8 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 14. The High Court of Calcutta in B.K. Gooyee (supra) was considering the legal impact of an unsigned notice issued u/s.34 of the Income Tax Act, 1922 and whether there can be a waiver of a right of an assesse to challenge the same on the ground that the notice was unsigned. Whilst holding that a lack of signature on a notice invalidates the same, it has further gone on to hold that there can be no waiver to the right of an assessee to raise this objection where the condition precedent for assuming jurisdiction by the Assessing Officer is not fulfilled. To quote from the judgment it holds: In the present case there was more than a mere irregularity or a clerical mistake for, in my view, a notice without the signature lacks an essential and/or an integral and/or an inseparable vital part or requirement of a notice under section 34, a notice in terms of which is a condition precedent to the assumption of jurisdiction by the Income-tax Officer. It is notice with a body but without a soul. Hence, it is an invalid notice and consequently equivalent to no notice.Hence, these cases do not militate against the principle that there can be no waiver where the condition precedent for assumption of jurisdiction is not fulfilled. Accordingly, my opinion is that the notice under section 34 of the Income-tax Act, 1922, to be a proper, valid and legal notice, requires to be signed by the Income-tax Officer, non-compliance of which would make it bad and all the proceedings started thereafter would be without jurisdiction. Mr. Meyer, however, in the last resort contended that in the facts of this case, the assessee in any event, waived the notice. The expression \"wavier\" has a professional meaning. It is true that the notice was duly served and was said to have been received by the assessee, but it is determined on high authority, that the notice under section 34 (I mean a valid notice) is a condition precedent for the assumption of jurisdiction. A notice under section 34 is therefore, not merely a procedural requirement. In its absence, it does not become a case of procedural defect. The difference between the cases of want of jurisdiction and those of irregular exercise of jurisdiction, is to be remembered in this context. 15. Following the ratio laid down in B.K. Gooyee (supra) and another, a Division Bench of the High Court of Calcutta in Aparna Agency (P.) Ltd. (supra) whilst considering the validity of an unsigned penalty order issued u/s.271B of the Income Tax Act, 1961 and whether such a defect was curable in terms of provisions of section 292B of the Act, held thus: 6. A close scrutiny of B.K. Gooyee's case (supra) could show that the question for consideration was regarding the irregularity in the issuing of a notice under section 34 of the Indian Income- tax Act, 1922. The notice did not contain the signature of the Income-tax Officer who issued it. It was held that service of a valid notice is a condition precedent to the assumption of jurisdiction by the Income-tax Officer totake further proceedings and that all proceedings taken in pursuance of a notice which does not contain the signature of the Income-tax Officer are invalid. It was further held that such irregularity cannot be waived and the question of its validity can be taken at any stage of the proceedings. Their Lordships of the Madhya Pradesh High Court have taken notice of the provisions contained in section 292B which provision was incorporated subsequent to the judgment in B.K. Gooyee's case (supra) and have specifically dealt with this question in the light of the provisions in section 292B. We are in respectful agreement with the view of their Lordships in Umashankar Mishra's case (supra) based on which the Tribunal in the case on hand reversed the order of the Commissioner of Income-tax (Appeals). 7. The observations in B.K. Gooyee's case (supra), which, in our view, have material bearing on the questions raised before us are extracted hereunder : \"In the present case, there was more than a mere irregularity or a clerical mistake, for, in my view, a notice without the signature lacks an essential and/or an integral and/or an inseparable vital part or requirement of a notice under section 34, a notice in terms of which is a condition precedent to the assumption of jurisdiction by the Income-tax Officer. It is notice with a body but without a soul. Hence, it is an invalid notice and consequently, equivalent to no notice.\" Page | 9 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 8. The service of a valid notice, as already noticed, is a condition precedent to the assumption of jurisdiction by the Assessing Officer. The existence of a valid notice is, therefore, a jurisdictional fact. The question, therefore, is not to be looked at from the perspective that the decision to issue notice was by an authority competent in that behalf under the Act and, therefore, submitting to his jurisdiction without objection, theinference of waiver arises. The question being one of jurisdiction, to be more specific the condition precedent to the assumption of jurisdiction what has to be seen is that the person that purported to exercise the jurisdiction vested in him had in fact exercised that jurisdiction and signed the said notice. The said test has not been satisfied in the case on hand. Unlike the judgment of this court in Anand and Co. [1994] 207 ITR 418 relied upon by the Revenue the case on hand is not one where the authenticity of the show-cause notice is in question. In the case on hand as held by the fact-finding authority the show-cause notice has not been signed by any person and the place intended for signature was kept blank. 16. The Madhya Pradesh High Court has taken a similar view in Umashankar Mishra (supra) whilst following the same line of thinking as the Calcutta High Court in B.K. Goyee (supra) and has held as under: 4. The first question for consideration is whether the Tribunal was right in holding that the notice issued to the assessee under section 271(1)(a) of the Act was a valid notice. Now, the Tribunal has found that that notice was not signed by the ITO. Section 282 of the Act provides that a notice under the Act may be served on the person named therein as if it were a summons issued by a court under the Code of Civil Procedure, 1908. Sub-rule (3) of Rule 1 of O.5, CPC, provides that every summons shall be signed by the judge or such officer, as he appoints. In view of this provision, it must be held that the notice to show cause why penalty should hot be levied issued by the ITO should have been signed by the ITO and the omission to do so invalidated the notice. In B.K. Gooyee v. CIT [1966] 62 ITR 109 (Cal), the question for consideration was whether the absence of the signature of the ITO on the notice under section 34 of the Indian I.T. Act, 1922, was a mere irregularity or a clerical mistake. Dealingwith this question, Datta J. Observed as follows (p. 119): \"In the present case, there was more than a mere irregularity or a clerical mistake, for, in my view, a notice without the signature lacks an essential and/or an integral and/or an inseparable vital part or requirement of a notice under section 34, a notice the terms of which are a condition precedent to the assumption of jurisdiction by the Income-tax Officer. It is notice with a body but without a soul. Hence, it is an invalid notice and consequently, equivalent to no notice.\" 5. We respectfully agree with the aforesaid observations. The Tribunal distinguished the decision in [1966] 62 ITR 109 on the ground that the provisions of section 292B of the Act were introduced after that decision. But, that provision, in our opinion, is intended to ensure that an inconsequential technicality does not defeat justice. But, the signing of a notice under section 271(1)(a) of the Act is not merely an inconsequential technicality. It is a requirement of the provisions of O.5, rule 1(3) of the CPC, which are applicable by virtue of section 282 of the Act. Under the circumstances, the provisions of section 292B of the Act would not be attracted in the instant case and the Tribunal in our opinion, was not right in holding that the notice issued under section 271(1)(a) of the Act was a valid notice in the eye of law. 6. In view of our answer to the first question, our answer to the second question is that the Tribunal was not right in holding that the absence of the signature on the notice simply constituted a mistake or omission within the meaning of section 292B of the Act. 7. In view of the fact that no valid notice was served on the assessee before levying penalty, our answer to the third question is that, on the facts and in the circumstances of the case, the penalty levied under section 271(1)(a) of the Act was not valid. Thus, ouranswers to all the three questions referred to this court are in the negative and in favour of the assessee. Page | 10 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 17. Anand And Co. (supra) cited by the Revenue, proceeds on the basis that the notice issued u/s.148 of the Act did contain a signature, but the question before the Calcutta High Court was whether the signature was authenticated or not. In that case, the signature was affixed in the form of a curved line, which the assessee claimed was not an authentic signature. It is in that context that the High Court of Calcutta in Anand And Co. (supra) has held that the notice was proper, Anand and Co. (supra) was not a where there was no signature at all on the notice, but in view of the fact that the only challenge was to the doubtful authenticity of the curved line purporting to be his signature, the assessee could not raise an objection that the notice was infact invalid. In the facts of that case, the ratio laid down therein does not aid the argument of the respondents in any manner. 18. Sky Light Hospitality (supra) cited by the respondents was also not a case where the notice issued to the assessee was unsigned. That was a case where the notice u/s.148 was issued with a signature, but the address of the assessee was only partly correct. It was in that context that the Delhi High Court has held that the provisions of section 292B of the Act, where there was a mistake, defect or an omission in the complete address on which the notice was issued to the assessee, would cure such defect, and an objection to the validity of the notice could not be raised. In that fact of the matter, the judgment in Sky Light Hospitality (supra) would not be applicable to the facts of the present case, which is one where the signature of the Assessing Officer was not affixed on the notice. 19. Applying the ratio of the judgment of the Calcutta High Court in B.K. Gooyee and Aparna Agency (P.) Ltd. (supra) to the facts of the present case, the signature of the Assessing Officer admittedly not having been affixed on the notice issued u/s.148 of the Act, the notice itself would be invalid and consequently, the Assessing Officer could not assume jurisdiction to proceed in the matter in terms of section 148 of the Act. The Madhya Pradesh High Court in Umashankar Mishra (supra) has dealt with a similar fact situation where the first substantial question of law dealt with in that case had considered the effect of whether an unsigned notice can be considered as an irregularity or clerical mistake. The Madhya Pradesh High Court after making reference to the conclusions drawn in B.K.Gooyee (supra) by the Calcutta High Court, has taken the view, that a notice without a signature affixed on it is an invalid notice and is effectively no notice in the eyes of law. 20. The Madhya Pradesh High Court in Umashankar (supra) has further dealt with the second substantial question of law as to whether the Tribunal was right in holding that the absence of a signature on the notice constitutes a mistake or omission within the meaning of section 292B of the Act and while addressing itself to that question, has concluded that in the absence of a signature on the notice, the same would not constitute a mistake or omission and would not be curable under the provisions of section 292B of the Act. 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 ofthe 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.” Page | 11 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 010. The case of the assessee find support from the decision of in the case of Keshab Narayan Banerjee (supra) herein the Hon'ble Kolkata High Court has held as under:- “We, therefore, are of the view that there is neither any material which could justify the inference or finding that service by registered post was either effected or should be deemed to have been accomplished nor was this the case of the respondents before the learned single judge and thus the learned single judge erred in law in returning such a finding. We have, therefore, no hesitation in holding that the service by registered post of the notices allegedly sent to the appellant writ applicant, resulting in the passing of the order under section 147 of the Act was not properly effected or accomplished. Since, admittedly, the service of such notices was a necessary pre-requisite, a condition precedent for passing of the orders under section 147 of the Act, we also have no hesitation in holding that such orders were bad in law, and, therefore, the proceedings under section 263 of the Act, admittedly, originating from such orders could not be initiated against the appellants. The service of such notices, therefore, not having taken place, the Commissioner of Income-tax was not in law justified to invoke his jurisdiction under section 263 of the Act. On an overall consideration, therefore, we do not find ourselves in agreement with the view taken by the learned single judge that the notice under section 147/148 of the Income-tax Act was properly served by registered post. We set aside such finding of the learned single judge and because the entire basis of the operative part of the judgment of the learned single judge proceeded on the premises of due service of the registered cover, contents being subject to proof, such basis having been knocked out, nothing survives in so far as the operative part of the judgment under appeal is concerned. The judgment under appeal, therefore, is set aside in so far as the operative part is concerned. The appeal accordingly is allowed, but without any order as to costs. 011. Similarly, the co-ordinate Bench in M/s Classic Flour & Food Processing Pvt. Ltd. (supra), & in the case of Concord infra project Pvt. Ltd. (supra), the co-ordinate Bench as held as under:- “After having considered the judicial precedent on the issue we are of the view that the validity of the order passed by the AO which is being interdicted by the Ld. PCIT in the impugned order assailed before us, can be examined as to whether the AO had the requisite jurisdiction to re-open/re-assess the escaped income of the assessee. Therefore, in this case we need to examine the action of AO dated 29.12.2017 passed u/s 147 of the Act which action of AO depends upon the AO assuming validly the jurisdiction to pass an order of assessment u/s 147 of the Act. It is settled law that the AO can reopen the assessment only after fulfilling the conditions laid down in the said section (section 147 of the Act) namely reason to believe that income chargeable to Page | 12 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 tax for that assessment year has escaped assessment. If this essential condition is not satisfied by the AO before initiating assuming jurisdiction u/s 147 of the Act then in such an event it cannot be said the AO has validly assumed jurisdiction u/s 147 of the Act. As discussed even if for any reason, the assessee had not challenged the validity of proceedings u/s 147 of the Act by filing appeal against the order framed u/s.147 of the Act, it can be challenged in the appeal against an order passed by the Ld. PCIT u/s 263 of the Act revising the invalid order u/s 147 of the Act. As noted this issue has been analysed by the Mumbai Bench of the Tribunal in the case of M/s. Westlife Development Ltd. (supra) wherein the Tribunal has equated the reopening assessment u/s 147 to primary proceedings and the subsequent proceedings by Ld. PCIT u/s 263 passed to be collateral proceedings. In this order the Tribunal has taken note of several ratio’s of the Hon’ble Supreme Court wherein the Hon’ble Supreme Court held that if the primary proceedings are non-est in law or void on the ground of lack of jurisdiction, then the validity of such proceedings can be challenged even in an appeal arising out of collateral proceedings. Since we have already set out the ratio/operating portions of these decisions we do not wish to repeat the same for the sake of brevity. In the light of the aforesaid discussion we are of the view that the invalidity of the primary proceedings for lack of jurisdiction can be challenged even in appellate proceedings arising out of a collateral proceeding. In view of the aforesaid legal position we will now examine the legal issue. For doing that first of all we have to examine whether the AO in the present case, could have reopened the assessment of the assessee by issuance of notice u/s 148 of the Act (which ultimate resulted in AO order dated 29.12.2017). 10. Now for examining this legal issue we need to examine whether the jurisdictional fact and pre-conditions for re-opening an assessment as stipulated u/s 147 of the Act was present/satisfied before the AO issued notice for re-opening dated 17.03.2017. Before we do the factual analysis in respect of this legal issue, let us have a look at the scheme of the Income Tax Act which gives power to the Income Tax Authorities as per Section 116 of the Act who are appointed by the Central Government u/s 117 of the Act. The Act/Statute vest power on certain Income Tax Authorities assigned as Assessing Officer (hereinafter the AO) to assess/ascertain the income of the a subject/assessee and to determine the tax payable by that subject/assessee by framing an assessment order for an Assessment year. The concept of assessment is governed by the time barring rule and an assessee acquires a right as to the finality of proceedings. Queitus of the completed assessment can be disturbed only when there is information or evidence regarding undisclosed income or AO had information in his possession showing escapement of income. So when an AO receives an information regarding undisclosed income of an assessee in respect of an assessment year which has escaped assessment, then the AO has to examine the information by verifying the source of it and then also has to keep in mind that information adverse against an assessee may trigger “reason to suspect”; then the AO to make reasonable enquiry and collect material which would make him believe, that there is in fact an escapement of income. And thereafter if he believes the existence of escapement of income then record his reason to believe escapement of income and then issue notice u/s. 148 of the Act and not before that. Let us look at the settled position of law on this issue. 11. As noted (supra) the Parliament has given power to AO to reopen the assessment, if the condition precedent as discussed above are satisfied, and not Page | 13 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 otherwise. It should be kept in mind that the concept of assessment is governed by the time-barring rule and the assessee acquires a right as to the finality of proceedings. Queitus of the completed assessment is the Fundamental Rule and exception to this rule is Re-opening of assessment by AO under section 147 or exercise of Revisional jurisdiction by CIT under section 263 of the Act. Therefore, the Parliament in its wisdom has provided safeguards for exercise of the reopening of assessment jurisdiction to AO; and revisional jurisdiction of CIT by providing condition precedent which is sine qua non for assumption/usurpation of jurisdiction. In the case of reopening of assessment, the reason to believe escapement of income is the jurisdictional fact and law (mixed question of fact and law) and for revisional jurisdiction the order of the AO should be erroneous as well as prejudicial to the revenue. Unless the condition precedent is not satisfied, the AO or the CIT can exercise their reopening jurisdiction or revisional jurisdiction respectively. The legislative history is that in respect to the reopening u/s. 147 of the Act, the Parliament by Direct Tax Laws (Amendment) Act 1987 w.e.f. 01.04.1989 had substituted \"for reason to believe escapement of income\" to 'for reasons to be recorded by him in writing, is of the opinion'' which gave unbridled subjective satisfaction to the AO was later substituted back to 'reason to believe escapement of income'', by the Direct Tax Laws (Amendment) Act, 1989. The Hon'ble Apex Court as well as the Hon'ble jurisdictional High Court as well as other Hon'ble High Courts have already held in plethora of cases the test of a prudent person instructed in law in understanding jurisdictional fact and law (mixed question of fact and law) the reason to believe escapement of income (supra). 12. So the condition precedent as discussed above is the jurisdictional fact & law, which is sine qua non for the AO to successfully usurp the jurisdiction u/s. 147 of the Act and it has to be also kept in mind that the jurisdictional fact (mixed question of fact and law) referred to in section 147 of the Act i.e Reason to believe escapement of income should be that of AO and not that of any other authority, because then it will be against one of the basic feature of the Constitution of India ie, the Rule of Law, wherein the Parliament has empowered this reopening jurisdiction only to that of Assessing Officer and that is why if the reason to believe escapement of income is not that of AO, the assumption of jurisdiction to re-open, has been held to be vitiated and resultantly bad in law, since it will be on the basis of borrowed satisfaction. 13. Now coming back to the present appeal, when we examine the legal issue on the touchstone of the settled judicial precedents on re-opening let us examine the reason recorded by the AO to re-open the assessment of AY 2010-11 pursuant to which the AO issued the notice u/s 148 of the Act dated 17.03.2017. According to the Ld. AR, the premises/jurisdictional fact for reopening the assessment is discernible from the assessment order dated 29.12.2017 itself wherein the AO in his own words have stated as under: “Assessee submitted return on 29.07.2010, showing total income of Rs. 443/- and the case was processed accordingly, subsequently the case was selected for scrutiny u/s 147 on the basis of an information received from the authentic source that M/s Miracle Commodities Pvt Ltd there is frequent high value deposit in their bank accounts and immediate transfer to some third party account. During the course of further investigation it is found that large value of amount has been routed to M/s Concord Infra Projects Pvt. Ltd. Page | 14 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 From further detailed investigation and analysis of data/information it is revealed that during the FY:2009-10 corresponding to A Y :2010-11, M/s Concord Infra Projects Pvt Ltd has allotted shares @ Rs. 10 per share at high premium to as many as 16 Kolkata based companies amounting to Rs. 8,34,00,000/-. The fund so raised was invested in the shares of Kolkata based companies at very high premium which does not commensurate with the financial position of the company in which such investment was made. Subsequently there was change in the Directors of M/s Concord Infra Projects Pvt Ltd. It clearly shows that the company has been sold claimed as to real beneficiaries who channelized their unaccounted income and converted bogus investment to real usable assets. Funds so liquidated by way of selling bogus investment in the name of Kolkata based companies are finally converted into real assets as Short Term Loan & advances/Cash & Bank balance as claimed. The case was supposed to be examined whether it was bogus or unaccounted . It is further mentioned that M/s Concord Infra Projects Pvt Ltd is a designated jamakharchi company incorporated to launder unaccounted income as per Departmental Database.” 16. From a perusal of the aforesaid reasons it is evident that the jurisdictional fact/information on which the AO has based his reason to believe escapement of income was that the department received an authentic information that huge value of deposits were made in the bank account of one company called M/s. Miracle and thereafter the money was transferred to some third party account and that further investigation had revealed that large amount of money was routed to the assessee company i.e. M/s. Concord Infra Projects Pvt. Ltd. According to the Ld. AR, this foundational fact on the basis of which the AO had based his “reason to believe escapement of income” is factually wrong/erroneous since the foundation fact has been found to be absent, which fact is evident from the factual findings of the Ld. PCIT in the impugned order wherein he has made a specific finding of fact in his conclusion recorded at page 40 of the impugned order wherein he concludes in his own words “in conclusion the relevant fact which constitute the present case are that the alleged large transaction of M/s. Miracle have not been reached directly/indirectly to the assessee company as evident from bank account of the assessee company nor through share subscriber companies (shareholders) to whom the assessee company has allotted shares.” Therefore, according to the Ld. AR, this finding of fact by the Ld. Pr. CIT clearly reveals that the deposits in the bank account of M/s. Miracle has not been routed to the assessee company which assertion of the Ld. A.R. could not be rebutted/contradicted by the Ld. CITDR. So Ergo, we note that the foundation on which the reason to believe escapement of income by the AO to issue notice u/s. 148 of the Act on 17.03.2017 itself was on wrong assumption of fact as is evident from the finding of fact by the Ld. PCIT that no money from M/s Miracle has been routed to the assessee company directly or indirectly whereas the foundation fact on the basis of which reopened the assessment as is evident from the reasons recorded (supra) was that high value of money was deposited in the bank account of M/s Miracle which in- turn has been routed to the assessee through third party in the form of share subscription to the tune of Rs. 8.34 crores which fact was found by Ld. PCIT to be absent. So, the AO’s belief of escapement of income was on wrong assumption of facts Page | 15 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 and so invocation of reopening jurisdiction by issue of notice u/s 148 of the Act is bad in law and, therefore, the consequent re-assessment order dated 29.12.2017 of the AO is a nullity and, therefore, the order of the Ld. Pr. CIT to interfere in the order of the AO dated 29.12.2017 u/s. 144/147 of the Act is also a nullity and, therefore, the action of the Ld. Pr. CIT to invoke his jurisdiction u/s. 263 of the Act itself was without jurisdiction. Ergo, we hold the impugned order as null in the eyes of law, so we quash it. 17. In the result, the appeal of assessee is allowed.” 012. Therefore, considering the facts of the assessee in the light of the above decisions ,we are inclined to conclude that the order passed u/s 263 of the Act revising invalid the assessment order passed u/s 147 of the Act is invalid and therefore consequential proceeding u/s 263 of the Act as well as the order passed u/s 263 of the Act are bad in law. So far as the second plea of the assessee is concerned that show cause under Section 263 of the Act was issued to the assessee on 08.12.2024, fixing hearing on 17.01.2024, which remained non- complied and similarly, when the case was again refixed on 09.02.2024, the same was again not attended by anyone, we find that the said observations of the ld. PCIT is totally against the facts available on record filed before us. We find from the e-proceeding response acknowledgement that assessee replied to the said notices along with annexure 1, on two occasions one on 25.01.2024 and second on 8.02.2024. E-proceeding response acknowledgements are available in Paper Book at page nos.31 and 43, which corroborates the averments made by the ld. Counsel for the assessee. In the said replies the assessee not only made submissions with regard to the validity of the proceedings u/s 263 but also on merits that all facts were before the AO which were examined by the him but the same were not considered by the ld. CIT(A) . Not only that during the course of assessment proceedings also the AO raised specific query with regards to sum of Rs. 2,01,87,000/-vide his notice dated 8.1.2024 which is filed at page 29 of the paper book. Thus, the said Page | 16 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 issue was examined by the AO. Therefore, we are inclined to hold that once replies are filed by the assessee before the authorities, which has not been considered, then it is presumed that the Revenue has accepted the reply of the assessee as has been held in the case of M/s Kesoram Industries Ltd. (supra). So far as the third plea of the assessee is concerned that ld. PCIT has wrongly observed that the ld. AO has not examined the issue of ₹2,01,87,000/- which was taken from M/s Sheetal Steel (Prop. Shri Pulak Saha) through various intermediary companies, we note that the assessee filed the reply on 16.09.2021 as evidenced by e-proceeding response acknowledgement, wherein the assessee stated the very reasons for which the reopening proceedings were initiated were factually incorrect and requested for the dropping of the same. Therefore, the ld. AO only after considering the reply of the assessee accepted the same and it is presumed that the ld. AO has examined and applied his mind on the reply and documents furnished before him by the assessee. The case of the assessee find support from the decision of Calcutta High Court in case of M/s Kesoram Industries Ltd. (supra), wherein Calcutta High Court held as under:- “5. In the present case, four broad aspects were questioned before the Tribunal. By the order impugned dated November 4, 2016, the Tribunal held in favour of the assessee. 6. The first aspect pertains to an order under Section 143(3) of the Act which was found to be erroneous and prejudicial to the interest of the Revenue. The specific matter pertained to the difference in the addition of fixed assets of about Rs.1.10 crore. The notice under Section 263 of the Act was issued to clarify the difference. The assessee clarified the difference by its written submission and a reconciliation statement was also used. However, the Commissioner, instead of considering the reply, recorded that the issue had not been verified by the assessing officer. 7. The Tribunal set aside the decision of the Commissioner on the ground that the show-cause notice indicated a specific purpose but the matter was dealt with on another count after the receipt of the reply. The Tribunal relied on a view taken by a coordinate bench in Vesuvius India Ltd. v. CIT [2012] 23 taxmann.com 425/54 SOT 172 (URO) (Kol.) and a judgment of the Andhra Pradesh High Court in CIT v. G.K. Page | 17 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 Kabra, Co-operative Industrial Estate [1994] 75 Taxman 503/[1995] 211 ITR 336. In both cases, it was held that if the object of the notice was one and the matter was treated for a different purpose in the ultimate order, that may not be the appropriate exercise of the jurisdiction. 8. In the light of a possible view taken on the facts as they presented themselves in such regard, the order of the tribunal in respect of the first of the four heads does not call for any interference. 9. The tribunal found that the Commissioner had not even indicated in the show-cause notice that \"adequate enquiries were not carried out.\" The tribunal found that the assessing officer had conducted an enquiry regarding the addition of fixed assets. The tribunal referred to the notice issued under Section 142(1) of the Act and the reply of the assessee. The tribunal reasoned that the order passed by the assessing officer in such circumstances could neither be held to be erroneous nor prejudicial to the interest of the Revenue. In such regard, the tribunal referred to a judgment of the Allahabad High Court where it was observed that the Commissioner could exercise his jurisdiction under Section 263 of the Act \"only in cases where no enquiry is made by the assessing officer.\" 10. On the second aspect pertaining to disallowance under Section 14A of the Act read with Rule 8D (2) (ii) of the Income Tax Rules, 1962, the tribunal found that the assessing officer had netted off the interest paid with the interest income for working out the disallowance under Rule 8D. According to the tribunal, the assessing officer had applied his mind to the issue and it was not something that escaped the attention of the assessing officer for the Commissioner to assume jurisdiction under Section 263 of the Act on the ground that no enquiry in such regard had been conducted by the assessee. 11. Apropos the third aspect pertaining to trade discount, the tribunal found that the Commissioner had issued the notice for addition of trade discount on the ground that the assessee's claim for trade discount was not in order. The tribunal also found that details of the trade discount had been furnished by the assessee to the assessing officer at the time of assessment under Section 143(3) of the Act and the details of such discount had been included in the paper-book filed before the tribunal. Further, the tribunal found that the Commissioner had changed his stand as indicated in the notice and at the time of passing the order under Section 263 of the Act. For the same reasons, as in respect of the first head pertaining to fixed assets, the tribunal found that the Commissioner had acted without basis. 12. Finally, as regards the fourth issue pertaining to depreciation, the tribunal found that the Commissioner had raised the issue in the notice under Section 263 of the Act for excess depreciation but concluded in his order that proper enquiries had not been made by the assessing officer. Again, the tribunal found that there was a change in stand with regard to the notice and in the revision order, which was impermissible. 13. In matters of the present kind where there is a specialized tribunal in place for dealing with matters pertaining to a particular subject, the scope of interference is limited in the present jurisdiction. Once it is seen that a plausible or reasonable view has been taken by the tribunal upon a fair discussion of the matter, this Court in Page | 18 ITA No.919/KOL/2024 Raghuvir Retailers Pvt. Ltd.; A.Y. 2013-14 exercise of the authority available in this jurisdiction would not supplant its view in place of the tribunal's unless the error is apparent and palpable. 14. The tribunal has given adequate reasons, and relied on precedents, as to why the manner in which the jurisdiction exercised by the Commissioner under Section 263 of the Act was found to be erroneous. There does not appear to be any legal error committed by the tribunal in either taking up the appeal or in deciding the same, particularly since cogent grounds have been indicated for interfering with the order of the Commissioner passed under Section 263 of the Act. 15. The questions framed are answered in the negative in every case. ITA No. 169 of 2018 is dismissed. 16. There will be no order as to costs.” 013. Considering the facts of the present case before us in the light of the various decisions as discussed above, we are of the considered view that the revisionary jurisdiction is invalid and is accordingly quashed. 014. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 11.02.2024. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 11.02.2024 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "