1992 (1) TMI 12 - HC - Income Tax

Appellate Authority Assessment Year Exclusion From Limitation Finding Or Direction Income Tax Act Information That Income Has Escaped Assessment Relief In Respect

Summary

Issues:
Validity of the return filed by the assessee-company on February 14, 1978, under sections 140(c) and 292B of the Income-tax Act, 1961.

Detailed Analysis:

The case involved a dispute regarding the validity of the return filed by the assessee-company on February 14, 1978, for the assessment year 1977-78. The return was initially signed and verified by a director-cum-general manager, not the managing director as required by section 140(c) of the Income-tax Act, 1961. The Income-tax Officer deemed this initial return invalid due to non-compliance with the statutory provision. Subsequently, a fresh return was filed on January 28, 1980, duly signed and verified by the managing director, along with an explanation that the original signatory was not available. The Commissioner of Income-tax (Appeals) upheld the invalidity of the first return, leading to an appeal to the Tribunal by the assessee.

The Tribunal, after considering the submissions and facts of the case, supported the decision of the Commissioner of Income-tax (Appeals) based on the requirements of section 140(c). The Tribunal noted that the assessee had not provided a specific reason for the deviation from the statutory provision. The High Court analyzed the contentions raised by the assessee's advocate, emphasizing the mandatory nature of section 140(c) which requires the managing director to sign and verify the return, with an exception only in unavoidable circumstances. The Court highlighted that the original return's verification by a general manager did not meet the legal requirement, leading to the Income-tax Officer's directive for a valid return.

The Court also addressed the argument regarding section 139(9) of the Income-tax Act, which deals with rectifying defects in returns. However, it clarified that the provisions of section 139(9) did not apply to the case as the defect in the original return was not related to the specified defects under that section. Additionally, the Court referred to section 292B, which protects returns from being invalidated due to technical mistakes if they align with the Act's intent. In this case, the Court concluded that the original return's failure to comply with section 140(c) rendered it invalid, despite the provisions of section 292B.

Ultimately, the Court held that the first return filed by the assessee-company was invalid due to non-compliance with section 140(c) and upheld the decision in favor of the Revenue. The judgment highlighted the importance of strict adherence to statutory provisions regarding the signing and verification of income tax returns by designated officials.