2006 (9) TMI 178 - HC - Income Tax

Assessing Officer, in view of section 140(c) of the Income-tax Act, 1961, came to the conclusion that since the return was not signed by the managing director or the director, it was non est. - the defect was a curable defect and an opportunity ought to have been given to the assessee to rectify it - There is nothing to suggest that any prejudice will be caused to the Revenue appeal of revenue is dismissed

Summary

Issues:
1. Validity of income tax return not signed by managing director or director.
2. Curability of the defect in the return filing process.
3. Maintainability of appeal before the Commissioner of Income-tax (Appeals).
4. Applicability of section 139(8) of the Income-tax Act.
5. Dismissal of appeal by the Tribunal and affirmation of the direction to rectify the return signing issue.

The judgment pertains to the appeal by the Revenue against an order of the Income-tax Appellate Tribunal concerning the validity of an income tax return for the assessment year 1994-95. The return, declaring a loss, was not signed by the managing director or director of the assessee company but by the general manager (finance) and company secretary. The Assessing Officer deemed the return "non est" under section 140(c) of the Income-tax Act due to the lack of proper signatures. The Commissioner of Income-tax (Appeals) considered the defect curable and directed the Assessing Officer to allow the assessee to rectify it, noting the possibility under section 139(8) of the Act. The Revenue contended before the Tribunal that the appeal to the Commissioner of Income-tax (Appeals) was not maintainable and the defect was not curable.

The Tribunal upheld the Commissioner's decision, dismissing the Revenue's appeal and affirming the direction to rectify the return signing issue. The High Court concurred, emphasizing that the assessee did not disown the return signed by the general manager (finance) and had granted a power of attorney for the purpose. The Court found no grounds to suggest prejudice to the Revenue if the return was signed by the managing director or director, as directed by the Commissioner of Income-tax (Appeals). Consequently, the Court concluded that no substantial question of law arose for consideration and dismissed the appeal.

In essence, the judgment highlights the importance of procedural compliance in income tax return filing, the curability of certain defects, and the necessity of providing opportunities to rectify such issues before deeming returns invalid. The decision underscores the significance of adhering to statutory requirements while also ensuring fairness and reasonable opportunities for rectification in tax assessment procedures.