Company tax return signed by unauthorised person u/s140(c): defective but curable; s.154 rectification denied, assessee wins

A company's return signed and verified by a person not authorised under s.140(c) is a defective return, not a non est return, because the Act contemplates curing defects under s.139 and s.292B protects returns that are in substance in conformity with the Act. However, whether s.292B validates such a defect is a debatable question of law, and a debatable issue cannot be corrected by rectification under s.154, which is confined to mistakes apparent from the record. Consequently, the HC upheld the Tribunal's view that s.154 was inapplicable and answered the reframed question in favour of the assessee and against the Revenue.

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Issues Involved:
1. Applicability of Section 292B of the Income-tax Act, 1961.
2. Validity of action under Section 154 of the Income-tax Act, 1961.

Summary:

Issue 1: Applicability of Section 292B of the Income-tax Act, 1961
The Tribunal referred the question of whether the applicability of section 292B of the Act is a debatable question to rule out the application of section 154 of the Act. The dispute arose from a return filed by a public limited company, signed by an unauthorized person, which the Assessing Officer deemed non-est. The Commissioner of Income-tax (Appeals) upheld this view, but the Tribunal later accepted that section 292B took care of the situation, making action under section 154 unwarranted. Section 292B states that no return shall be invalid merely due to any mistake, defect, or omission if it is in substance and effect in conformity with the intent and purpose of the Act. The court noted that the principle "qui facit per alium facit per se" allows a duly authorized agent to sign on behalf of the principal unless the law specifically requires the individual's signature. The court concluded that the return signed by an unauthorized person was defective but not non-est, and section 292B applied to cure such defects.

Issue 2: Validity of Action under Section 154 of the Income-tax Act, 1961
Section 154 allows rectification of any mistake apparent from the record. The court emphasized that a mistake must be obvious and patent, not requiring elaborate arguments. The Supreme Court's precedents indicate that a mistake apparent from the record must be self-evident and not debatable. The Revenue argued that the unauthorized signature rendered the return non-est, but the court found this plea unsubstantial. The court held that the defect in the return did not make it non-est but rather defective, which could be rectified under section 292B. Therefore, the Tribunal was justified in concluding that section 154 did not apply to this case.

Conclusion:
The Tribunal's decision about the non-applicability of section 154 was upheld. The court answered the question in the affirmative, in favor of the assessee and against the Revenue.

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