Return of income : Defective/invalid return : S. 140 of Income-tax Act, 1961 : A.Y. 1994-95 : Return signed by company secretary : Defect curable : Opportunity to rectify defect should be given.

[CIT v. Bhiwani Synthetics Ltd., 318 ITR 177 (Del.)]

For the A.Y. 1994-95, the assessee company had filed its
return of income on 30-11-1994 declaring a loss. The return was signed by the
general manager (finance) and the company secretary of the assessee. The
Assessing Officer came to the conclusion that since the return was not signed
by the managing director or a director as provided in S. 140(c) of the
Income-tax Act, 1961, it was non est. The CIT(A) held that the defect
was a curable defect and an opportunity ought to have been given to the
assessee to rectify it. He, accordingly, directed the Assessing Officer to
give such an opportunity to the assessee. The Tribunal upheld the decision of
the CIT(A).

On appeal by the Revenue, the Delhi High Court upheld the
decision of the Tribunal and held as under :

“(i) We are of the view that on the facts of this case,
since there is nothing on record to suggest that the assessee has disowned
the return that was signed by the general manager (finance) of the assessee
and on the contrary, a power of attorney was given by the assessee to its
general manager (finance) for signing the return, it would have been
appropriate if an opportunity had been granted to the assessee to have the
return signed by the managing director or its director in accordance with
the directions given by the CIT(A).

(ii) There is nothing to suggest that any prejudice will
be caused to the Revenue if this direction is complied with.”