9911796707
TMI Blog1991 (6) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... paid on commencement of commercial production. The Indian company remitted US $ 40,000 with the Indian (sic) company after obtaining 'no objection certificate' from the IAC (Asst.), Range V,New Delhi. A sum of Rs. 90,000 was paid as tax by the Indian company. 3. Return declaring an income of Rs. 4,50,000 was filed by the Indian company in the name of the foreign non-resident company, signed by Shri J.R. Desai, Managing Director of the Indian company. Before the Assessing Officer it was contended by the Indian company that it could not be treated as agent of the non-resident company as no notice under s. 163 was issued to the Indian company treating it as an agent of the non-resident company. The Assessing Officer was of the view that since the Indian company has itself filed the return int he name of the non-resident company, signed by its Managing Director, it has voluntarily offered itself to be treated as agent of the non-resident company. As such, the return was treated as valid. Here it may be pointed out that one of the objections raised before the Assessing Officer was that the return filed in the name of non-resident company was not signed by the representative of the non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, rejected. 9. As ground No. 1, raised by the assessee in the cross-objections, goes to the very root of the matter, it is being taken for consideration first. The facts, already stated above, have not been disputed before us. There was a collaboration agreement between the Indian company and the non-resident foreign company. This agreement is dt.6th July, 1981. Under this agreement, the Indian company had to make a payment of US $ 1,00,000 to the non-resident company for receiving drawings, specifications, process, schedules and all technical documents, etc. As already pointed out above, the Indian company filed return of income on behalf of non-resident company disclosing an income of Rs. 4,50,000 being equivalent to US $ 50,000 remitted to the non-resident company. The return was signed by the Managing Director of the Indian Company. On these facts it was submitted by learned counsel for the assessee that since the return filed on behalf of non-resident company was not signed by the person authorised to do so, it was invalid and non est in the eye of law and that the assessment framed on the basis of such return was also invalid and was liable to be quashed. In support of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rival submissions as also the facts on record. In the case of Jadav Ji Narshi Das, it has been held that where a person without being called upon to submit a return by a notice under s. 22(2) of the IT Act, 1922, voluntarily submitted a return as an agent of a non-resident, an assessment made on such person as agent of the non-resident, cannot to held to be invalid merely for want of a formal notice under s. 43B of the ITO's intention to treat him as agent of a non-resident person. Similar view has been expressed in the other decision of the Bombay High Court, cited on behalf of the Revenue. In both these cases, return was filed by the agent on its own behalf and not on behalf of the principal represented by the agent. Assessments in those cases were framed on the agent and not on the principal. So, the decisions of the Bombay High Court are clearly distinguishable and they do not support the contention advanced on behalf of the assessee (sic) that a return filed on behalf of the non-resident company is a valid return as it has been signed on its behalf by its agent, namely, the Indian company. 12. Under s. 166 an assessment can be framed either on the representative assessee o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r it is only a defect which is curable under s. 139(9) or as contended on behalf of the Revenue whether such defect or omission would not render the return invalid in view of s. 292B. Sub-s. (9) of s. 139, inter alia, lays done that where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect tot he assessee and give him an opportunity to rectify the defect within a period of fifteen days or within such further period which, on an application, made in this behalf, the Assessing Officer may, in his discretion allow and if the defect is not rectified within the said period, then notwithstanding anything contained in any other provision of the Act, the return shall be treated as an invalid return and the provisions of the Act shall apply as if the assessee had failed to furnish the return. For the purpose of sub-s. (9), the Explanation under that sub-section enumerates the defects which are curable under this sub-section. The defects enumerated under the Explanation, do not include a case where the return has not been filed by the person authorised to do so under the provisions of s. 140. Further, in the instant cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e computation of tax was made on a separate sheet of paper which was not signed by the ITO. On these facts it was held that the assessment order was in substance and effect in conformity with or according to the intent and purpose of the Act, and, hence it was not invalid. Since the assessment in question was made after the insertion of s. 292B, this decision in fact goes to support the view that we have taken. This authority lays down the proposition that non-compliance with the provisions of the IT Act would vitiate the assessment order. In the case before us there was non-compliance of cl. (c) of s. 140 and the return was filed in violation of the mandatory provisions as contained in s. 140(c). So, in this case mandate of law has been violated and, therefore, the return not signed by the person authorised to do so in the instant case cannot be said to be in conformity with or according to the intent and purpose of the Act. 15. In Umashankar Misra vs. CIT (1982) 29 CTR (MP) 71 : (1982) 136 ITR 330 (MP) proceedings under s. 271 (1)(a) of the IT Act, 1961 were initiated against the assessee and a notice was issued by the ITO to the assessee to show cause why penalty should not be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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