Manually Signed Assessment Order in Income Tax E-Proceedings Held Invalid and liable to be Quashed : ITAT Delhi in Navyug Technologies Pvt. Ltd.
The Delhi ITAT has held that where scrutiny assessment is conducted through the e-proceedings mechanism, the final assessment order must be digitally signed, and a manually signed order is liable to be quashed. This ruling in Navyug Technologies Private Limited v. ITO, Ward 18(2), New Delhi reinforces the binding nature of CBDT Instruction No. 1/2018 for electronic assessments.
Case Background
In this case, the assessee’s scrutiny assessment was carried out through the Income Tax Department’s e-proceedings facility, but the assessment order was issued with a manual signature instead of a digital signature. The assessee raised an additional legal ground contending that the assessment order was invalid as it violated CBDT Instruction No. 1/2018 dated 12.02.2018.
The Tribunal admitted the additional ground by relying on the principle laid down in National Thermal Power Co. Ltd. v. CIT. The issue was treated as a pure question of law going to the root of the matter, and no fresh facts were required for adjudication.
Tribunal’s Finding
The Tribunal noted that CBDT Instruction No. 1/2018 specifically provides that orders, communications, and notices issued through the e-proceeding facility are to be signed digitally by the Assessing Officer. Since the assessment in this case was admittedly completed through e-proceedings but the final order was manually signed, the Tribunal held that the order suffered from a fatal procedural defect.
The Bench followed its earlier coordinate bench decision in Outsystems Singapore Pte. Ltd. v. DCIT, Circle International Tax 2(2)(2), New Delhi and also referred to Supreme Court principles that when the law prescribes a particular manner of doing a thing, it must be done in that manner alone. Consequently, the assessment was quashed and the assessee’s appeal was allowed.
Legal Significance
This ruling is important because it underscores that procedural compliance in faceless and electronic assessments is not a mere formality. If the department chooses the e-proceedings route, it must strictly follow the digital process prescribed by the CBDT.
For taxpayers, this decision provides a strong ground to challenge assessment orders where the electronic procedure has not been properly followed. For the department, it serves as a reminder that even technical deviations in digital assessment proceedings can invalidate the order.
Case Citation: Navyug Technologies Private Limited v. ITO, Ward 18(2), New Delhi, ITA No. 4579/Del/2024, order dated 16.02.2026, reported at 2026 (4) TMI 1246 - ITAT Delhi.