1994 (10) TMI 115 - AT - Income Tax

Summary

Issues:
1. Validity of original returns filed by Chief Accounts Officer instead of managing director.
2. Effect of filing revised returns signed by managing director.
3. Applicability of sub-section (9) of section 139 of the IT Act.
4. Interpretation of directions issued by CIT(A) to Assessing Officer.
5. Comparison of facts with previous year's Tribunal decision.
6. Authority of Assessing Officer to liquidate proceedings.

Issue 1: Validity of original returns filed by Chief Accounts Officer
For the assessment years 1977-78 and 1979-80, the original returns were filed by the Chief Accounts Officer instead of the managing director, as required by section 140(c) of the IT Act. The Assessing Officer held these returns invalid, leading to the liquidation of proceedings based on the Tribunal's decision in the assessee's case for the previous year.

Issue 2: Effect of filing revised returns signed by managing director
The assessee argued that revised returns signed by the managing director were filed to rectify the initial irregularity. The Tribunal agreed that the revised returns cured the defect, referencing the case law of CIT vs. Hindustan Dorr Oliver Ltd. The Tribunal emphasized that the revised returns related back to the original filing date and should be considered valid.

Issue 3: Applicability of sub-section (9) of section 139
The assessee contended that under sub-section (9) of section 139, any defects in the return should have been communicated to enable rectification. Since no such notice was issued, the Assessing Officer's decision to treat the returns as invalid was challenged.

Issue 4: Interpretation of directions by CIT(A) to Assessing Officer
The Tribunal emphasized that the Assessing Officer must adhere to the directions issued by the CIT(A) and cannot exceed the scope of those directions. Failure to follow the CIT(A)'s instructions was deemed unjustified, leading to the setting aside of the orders by the Revenue authorities.

Issue 5: Comparison with previous year's Tribunal decision
The Tribunal distinguished the facts of the current case from the previous year's Tribunal decision, where no valid return was filed. In the current case, valid returns were submitted, and the CIT(A)'s orders had become final as no second appeal was filed. Therefore, the Assessing Officer was not justified in liquidating the proceedings.

Issue 6: Authority of Assessing Officer to liquidate proceedings
The Departmental Representative supported the Revenue authorities' decision to consider the original returns invalid. However, the Tribunal held that the revised returns rectified the initial defect, and the Assessing Officer was bound by the CIT(A)'s directions, setting aside the Revenue authorities' orders.

In conclusion, the Tribunal set aside the orders of the Revenue authorities and directed the matter to go back to the Assessing Officer for a fresh decision in accordance with the law. The appeals were treated as allowed for statistical purposes.