1982 (8) TMI 108 - AT - Income Tax

Issues Involved:
1. Validity of thumb impression of Munshi Ram on Form No. 12 for the assessment year 1977-78.
2. Validity of the signature of Sher Singh on Form No. 12 for the assessment year 1978-79.
3. Applicability of Section 185(3) of the Income-tax Act, 1961 regarding rectification of defects in Form No. 12.
4. The obligation of the Income Tax Officer (ITO) to provide an opportunity to rectify defects in Form No. 12.

Issue-wise Detailed Analysis:

1. Validity of Thumb Impression of Munshi Ram on Form No. 12 for the Assessment Year 1977-78:
The ITO questioned the authenticity of Munshi Ram's thumb impression on Form No. 12 filed on 18th April 1977. The Finger Print Bureau, CID Headquarters, Madhuvan, provided an expert opinion stating that the impressions on the documents did not match the sample thumb impressions of Munshi Ram. The assessee countered this with a report from Shri A.M. Jha, an Examiner of Questioned Documents, who opined that no definite opinion could be given due to the blurred and smudged nature of the thumb prints. The ITO examined Shri Jha, who reiterated his written opinion, but the ITO found Shri Jha's opinion unreliable, favoring the Finger Print Bureau's report. Consequently, the ITO held that Form No. 12 was not valid as it was not personally signed by Munshi Ram.

2. Validity of the Signature of Sher Singh on Form No. 12 for the Assessment Year 1978-79:
The ITO doubted the authenticity of Sher Singh's signature on Form No. 12 filed on 23rd May 1978. The Government Examiner of Questioned Documents, Simla, confirmed the ITO's suspicion that the signatures were not personally written by Sher Singh. The assessee's expert, Shri A.M. Jha, provided a contrary opinion, asserting that the questioned signatures were indeed written by Sher Singh. The ITO, however, found Shri Jha's opinion unreliable and accepted the Government Examiner's opinion, leading to the conclusion that Form No. 12 was invalid due to the lack of personal signature by Sher Singh.

3. Applicability of Section 185(3) of the Income-tax Act, 1961 Regarding Rectification of Defects in Form No. 12:
The assessee argued that under Section 185(3) of the Income-tax Act, 1961, they should be given an opportunity to rectify any defects in Form No. 12. The ITO, however, believed that the defects in the forms could not be rectified later and refused to allow Munshi Ram to put his thumb impression on the same Form No. 12 for the assessment year 1977-78. The ITO also ignored the fresh Form No. 12 filed on 18th April 1979, which was duly signed by all partners.

4. The Obligation of the Income Tax Officer (ITO) to Provide an Opportunity to Rectify Defects in Form No. 12:
The Tribunal found that the ITO failed to provide the assessee with an opportunity to rectify the defects in the forms, as mandated by Section 185(3). The Tribunal noted that the ITO should have considered the fresh forms filed by the assessee, which were properly verified and signed by all partners. The Tribunal emphasized that the doubt in the ITO's mind regarding the authenticity of the thumb impression and signature could not replace concrete evidence. The Tribunal held that the ITO was bound to offer an opportunity to the assessee to remove the defects and that the rejection of the original forms due to doubt was not justified.

Conclusion:
The Tribunal concluded that the original applications for continuation of registration should not have been rejected based on the ITO's doubts. The Tribunal directed the ITO to allow the continuation of registration for both assessment years under appeal, as the defects were rectified by the fresh forms filed by the assessee. The appeals were allowed, and the orders of the authorities below were set aside.

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