[Hind Samachar Ltd., 169 Taxman 302 (P&H)]
For the A. Ys. 2000-01 to 2002-03, the assessee company had
filed returns of income claming refund. The verification of the returns was
signed by one ‘K’ who was neither the managing director, nor the director of the
assessee company, but was authorised to sign by a board resolution. The
Assessing Officer processed the returns u/s.143(1) of the Income-tax Act, 1961
and computed the refund payable to the assessee. Subsequently he issued notices
u/s.154 requiring the assessee to justify the genuineness of the returns in view
of the fact that ‘K’ who had signed the verification in returns did not fall in
the category of persons authorised to sign the return u/s.140(c). In response,
the assessee submitted that owing to an impass going on in the board of
directors of the company, a resolution was passed duly authorising ‘K’ to sign
and file the returns on behalf of the assessee and further, that the non-signing
of the returns by the managing director or any other director was at best a
curable defect. The assessee prayed for an opportunity to rectify the defect.
The assessee company also filed fresh returns duly signed by the managing
director and pleaded that the defects stood rectified. The Assessing Officer
rejected the assessee’s plea and held that the returns earlier filed were
invalid and accordingly withdrew the refund earlier allowed. The Commissioner
(Appeals) reversed the said order holding that if the returns were not signed by
the person mentioned in S. 140, it was only a curable defect. While giving
effect to the order of the Commissioner (Appeals), the Assessing Officer
rejected the plea of the assessee that the defect has been cured by filing new
return forms duly signed by the managing director on the ground that the same
were filed beyond the time permissible under the Act. Accordingly, the Assessing
Officer refused to grant refund.
The Punjab and Haryana High Court allowed the writ petition
filed by the assessee and held as under :
“(i) The return is required to be signed mandatorily by the
managing director of the company and in his absence, due to certain reasons,
by the director thereof.
(ii) S. 139(9) specifies the circumstances in which a
return would be regarded as a defective return. The list of defects mentioned
in the Explanation thereof is illustrative and not exhaustive.
(iii) S. 292B provides that no return of income shall be
invalid merely by reason of any mistake, defect or omission, if such return
is, in substance and effect, in conformity with or according to the intent and
purpose of the Act. The Section has applicability to those cases where purely
technical objection without substance arises in a case of a return of income.
S. 139(9) contains a non obstante clause, namely, ‘notwithstanding
anything contained in any other provision of this Act’ and would, therefore,
override the other provisions of the Act including S. 292B. If any curable
defect is noticed in the return, the Assessing Officer is required to provide
an opportunity to the assessee to rectify the same within the stipulated time
and in a case where any of the specified defects is not removed within the
time allowed u/s. 139(9), the return shall be treated as an invalid or non
est return.
(iv) However, a different situation would arise where a
return is not at all signed and verified. The question of rectifying of defect
in such a situation does not arise as the defect goes to the very root and
jurisdiction of the validity of the return.
(v) In the instant case, the return was signed by an
employee, who had been duly authorised by a resolution of the board to do so,
as there was litigation going on between the management. Thus the return was
not signed by the person authorised u/s.140(c). However, the return was got
signed and verified by the managing director and was filed along with a letter
dated 13-10-2003. Even on an opportunity provided by the Assessing Officer to
remove the defect in pursuance to the order of the Commissioner (Appeals), the
managing director attended the office of the Assessing Officer on 8-3-2005 and
signed the verification of the return. In such circumstances, the return filed
by the assessee could not be treated to be invalid or non est return.
(vi) The Assessing Officer, having failed to raise any issue
with regard to the plea of S. 239 at appropriate stage and the Commissioner
(Appeals) having remanded the case for purposes of getting the defect cured and
to give effect to that order, could not raise a new plea inconsistent with the
remand order. Still further, in the instant case, the provisions of S. 240 would
be attracted whereunder an obligation is cast upon the Revenue to refund the
amount to the assessee without having to make any claim in that regard in case
of refund arising on account of appeal or other proceedings under the Act.”
