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TMI Blog2006 (5) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... ere processed under section 143(1). Refunds were computed and made over to the assessee. Thereafter, notice under section 154 was issued to the assessee stating that since the returns had not been verified by the proper person, a mistake apparent from the record had occurred and the refund had wrongly been issued. 4. In response to the said notice, the assessee stated before the Assessing Officer, inter alia , that there had been a deadlock in the board of directors of the company, due to which, through a resolution of the board of directors, Shri Kultar Krishan had been authorised to sign and file, inter alia , the returns of income; that the said deadlock in the board of directors had led to litigation going upto the Hon ble Supreme Court; that the returns of income had been filed suo motu bona fide by the assessee in time; that the returns were signed by the assessee s employee under due power and authority given by the board of directors of the company; that the said power was given in view of exceptionally unavoidable circumstances i.e. the deadlock in the board of directors; that the returns had been duly processed and the refund orders had been issued and the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been held that if the statute requires personal signature of a person, that signature must be that of the man himself and that there must be physical contact between that person and the signature put on the document. Further, the learned CIT(A) has also failed to consider the decision of the Hon ble Madhya Pradesh High Court in the case of Khialdass Sons v. CIT [1997] 225 ITR 960, wherein it has been held that section 292B of the Act merely states that no return of income shall be invalid merely by the reason of any mistake, defect or omission therein, if the return is, in substance and effect, in conformity with or according to the intent and purpose of the Act; that the idea is that if any minor defect is there which does not militate against the intent and purpose of the Act, such minor defect can be cured, but according to section 140, which is mandatory, every return has to be signed and verified and if it is not so signed and verified, it is in breach of the provisions of section 140 of the Act and, therefore, it cannot be a defect which can be cured and any return which has been filed without signature and verification of the assessee, will not be treated as a valid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company instead of managing director or director, as required by section 140( c ), were valid returns and as to whether the refund issued to the assessee on processing these returns could be withdrawn under section 154 of the Act. 13. The facts are not disputed. The stand of the Department is that the provisions of section 140( c ) of the Act could not be overridden by a mere resolution of the board of directors of the assessee-company, authorising an employee to sign and verify the returns. The returns so signed and verified were entertained and refund issued. This was a mistake apparent on record which was correctly rectified by passing orders under section 154 of the Act. This action of the Assessing Officer was in accordance with law and was wrongly undone by the learned CIT(A) by passing the impugned order. On the contrary, the assessee asserts that the defect in the returns, if any, was a defect curable under section 292B of the Act, which was duly cured by filing returns signed by the managing director of the assessee-company in time, i.e. , before service of the orders under section 154 of the Act. Moreover, the refund once issued to the assessee and received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gupta [1978] 113 ITR 473 (All.), it was held, inter alia , that section 292B makes a clear departure from the pre-existing legal position; and that for that reason also, it cannot be held that this section is retrospective in its operation. Thus, the case laws rendered prior to the introduction of section 292B cannot and do not act detrimental to the case of the assessee. The decision of the Hon ble Calcutta High Court in the case of National Insurance Co. ( supra ) too, as discussed above, is different on facts. In that case, a notice regarding the defect in the return was issued to the assessee by the Assessing Officer, which is a fact materially different; here no such notice was ever issued to the present assessee. 17. In B.F. Goodrich Co. ( supra ), the Calcutta Bench of the Tribunal held, inter alia , that there is a consensus of judicial opinion that the absence of, or a defect in the signature of a party in a document is a curable defect and it does not invalidate the document; that section 292B of the Income-tax Act also gives effect to this legal position. 18. In Punjab United Pesticides Chemicals Ltd. ( supra ), the return of income was signed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. It was held that as such, the Assessing Officer should have treated the assessee as having filed the defective return earlier which was cured later on. 23. In Masoneilan (India) Ltd. ( supra ), the Hon ble Kerala High Court held that the defect of the return of assessee company not having been signed by a person as mentioned in section 140 was a defect curable under section 292B. It was also held that rectification proceedings under section 154 to declare the return as non est were not valid. This judgment is squarely applicable to the facts of the present case. 24. On having considered the above legally settled position, we find that looked from any angle, the stand taken by the Department is incorrect. In T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 , the Hon ble Supreme Court crystallised the position that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established only by a long drawn process of reasoning on points on which there may be conceivably two opinions; and that a decision on a debatable point of law is not a mistake apparent from the record. Evidently, the issue as to whether ..... 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