2009 (1) TMI 59 - HC - Income Tax

Return invalid for missing assessee signature and verification under s.140; s.292B cannot cure defect, AO may issue notice under s.148

HC held the return was invalid because it lacked the assessee's signature and verification required by s.140 of the 1961 Act; s.292B's deeming effect ... Defect in return - Assessment Procedure u/s 139(9) - validity of defective return - return under reference neither signed nor verified in terms of the mandate of Section 140 - notice issued to u/s 148, as the return earlier filed as a member of HUF - deeming effect of Section 292B of the 1961 Act in relation to defective returns - HELD THAT:- We are of the view, that the provisions of Section 292B of the 1961 Act, do not authorize the Assessing Officer to ignore a defect of a substantive nature and it is, therefore, that the aforesaid provision categorically records, that a return would not be treated as invalid, if the same 'in substance and effect is in conformity with or according to the intent and purpose of this Act'. In so far as, the return under reference is concerned, in terms of Section 140 of the 1961 Act, the same cannot be treated to be even a return filed by the respondent - assessee, as the same does not even bear her signatures and had not even been verified by her. In the aforesaid view of the matter, it is not possible for us to accept, that the return allegedly filed by the assessee was in substance and effect in conformity with or according to the intent and purpose of this Act. Thus viewed, it is not possible for us to accept the contention advanced by the learned counsel for the appellant on the basis of Section 292B of the 1961 Act. The return under reference, which had been taken into consideration by the Revenue, was an absolutely invalid return as it had a glaring inherent defect which could not be cured inspite of the deeming effect of Section 292B of the 1961 Act. Thus, we find no merit in the instant appeal and the same is, accordingly, dismissed. Issues: Whether a return which is neither signed nor verified can be treated as a valid return by application of Section 292B of the Income-tax Act, 1961, or whether such defect renders the return invalid and justifies setting aside the assessment made thereon.Analysis: The procedural framework for assessment requires that an assessee's return comply with conditions for validity and provides an opportunity to rectify defects under Section 139(9) of the Income-tax Act, 1961. Section 140 mandates that a return must be signed and verified by the assessee. Section 292B provides that returns or proceedings shall not be deemed invalid merely for mistakes, defects or omissions if they are in substance and effect in conformity with the intent and purpose of the Act. The issue turns on whether the absence of signature and verification is a substantive defect that can be cured by the deeming language of Section 292B or whether it is a fundamental requirement going to the existence of a return under Section 140. Where a return lacks the mandatory signature and verification, it fails to meet the statutory definition of a return and cannot be regarded as being in substance and effect in conformity with the Act; consequently Section 292B cannot be invoked to validate such an unsigned and unverified submission.Conclusion: The unsigned and unverified submission is an invalid return; Section 292B does not cure the substantive defect. The appeal is dismissed and the assessment set aside is affirmed in favour of the assessee.