1979 (12) TMI 84 - AT - Income Tax

Summary

Issues:
1. Validity of the return filed by the assessee on 29th Aug., 1975 due to the absence of signature.
2. Whether the omission of signature in the return constitutes a defect or invalidity.
3. Applicability of penal interest under section 139(8) for the period until 6th May, 1977.

Detailed Analysis:
1. The appeal pertains to the assessment year 1975-76, challenging the order of the ld. CIT(A) confirming the ITO's decision under section 154 to partly reject the assessee's application. The assessment was initially made on the assessee on 30th Aug., 1977, with interest under section 139 being charged until 6th May, 1977, based on a return filed on 29th Aug., 1975, which lacked the partners' signatures. The assessee filed an application under section 154, which was partially accepted, leading to the appeal to the Tribunal.

2. The crux of the issue revolves around the contention that the return filed on 29th Aug., 1975, without signatures, was not invalid but merely irregular. The counsel for the assessee argued that the absence of signatures was a curable defect and did not render the return invalid. The Tribunal referred to the provisions of Order 6 Rule 14 of the Code of Civil Procedure to support the view that the omission of signature constitutes an irregularity, not invalidity. The conduct of the ITO, treating the return as valid at various stages, further supported the argument that the return was not invalid due to the absence of signatures.

3. Drawing a parallel from a similar case before the Madras High Court, the Tribunal emphasized that a mere mistake in form selection does not render a return non-existent or invalid. The Madras High Court's decision highlighted that the ITO's actions based on the return indicated its validity, even if a wrong form was initially used. In light of these precedents, the Tribunal concluded that the return filed by the assessee on 29th Aug., 1975, with the absence of signatures, was not invalid but a curable defect. Consequently, the Tribunal directed the ITO not to charge penal interest under section 139(8) beyond 6th May, 1977, allowing the appeal.

In conclusion, the Tribunal's judgment focused on the distinction between a defect and invalidity concerning the absence of signatures in the return filed by the assessee. By analyzing legal precedents and the ITO's conduct, the Tribunal determined that the return was not invalid but irregular, warranting a direction to refrain from charging penal interest beyond a specified date.