2002 (1) TMI 259 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the return filed by the assessee.
2. Whether an appeal lies against the order of the Assessing Officer under section 139(9) of the Income-tax Act.
3. Entitlement of the assessee to carry forward the loss.

Detailed Analysis:

1. Validity of the Return Filed by the Assessee:
The main contention revolved around whether the return filed by the assessee was valid since the acknowledgement sheet was signed by the Manager, Taxation, and not the Managing Director who signed the return. The Assessing Officer initially processed the return but later deemed it defective under section 139(9) and invalidated it. The CIT(A) held the return valid, directing a fresh assessment.

2. Whether an Appeal Lies Against the Order of the Assessing Officer under Section 139(9) of the Income-tax Act:
The Tribunal examined whether the order under section 139(9) was appealable. The Assessing Officer's order included a determination that the assessee was not entitled to carry forward the loss, which the Tribunal interpreted as an order of assessment. Citing various High Court decisions, including the Patna High Court in Bihar State Electricity Board and the Calcutta High Court in CIT v. Garia Industries (P.) Ltd, the Tribunal concluded that such communication amounts to an assessment order, making it appealable under section 246 of the Act.

3. Entitlement of the Assessee to Carry Forward the Loss:
The Tribunal addressed whether the assessee was entitled to carry forward the loss despite the alleged defect in the return. The Assessing Officer's stance was that the defect was not rectified as per the Act, and the revised return was filed beyond the prescribed time limit. However, the Tribunal found that the defect was indeed rectified within the 15-day period allowed by the Assessing Officer, and the explanation provided by the assessee for the mistake was irrelevant to the rectification process.

The Tribunal further clarified that the acknowledgement sheet is not a part of the return as per Rule 12 of the Income-tax Rules. Even if considered part of the return, the defect was deemed curable. The Tribunal referenced the Kerala High Court in Masoneilan (India) Ltd. and the Calcutta High Court in Sheonath Singh, which supported the view that procedural defects like improper signatures are curable and do not invalidate the return.

Conclusion:
The Tribunal upheld the CIT(A)'s order, affirming that the return was valid and the assessee was entitled to carry forward the loss. The appeal by the revenue was dismissed, reinforcing that procedural defects in return filings can be rectified, and such rectifications relate back to the original filing date.