2009 (4) TMI 108

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....he provisions of Section 47(v) of the Income-tax Act (In short 'The Act') . This return was signed by the company secretary. In March,1992, the petitioner had issued fresh shares to entities other than its holding company as a result whereof the shareholding of Great Eastern Shipping Company Ltd. came down from 100% to 43% of the petitioner's share capital. 2. By letter of 9.10.1992 respondent no.1 informed the petitioner that the return it filed on 31^st December, 1991 was invalid inasmuch as the return was signed by the Company secretary and not by the Managing Director as required under section 140 of the Act. Petitioner was called upon to show cause as to why the return filed should not be treated as an invalid return. On 15.10.1992 petitioner substituted the return it filed on 31^st December, 1991 by another return which was identical to the one filed on December 31, 1991 except that it was signed by the Director in accordance with Section 140 of the Act. Petitioner informed respondent no.1 that on account of an inadvertent error the earlier return was signed by the Company Secretary and requested respondent no.1 to treat the original return filed on 31^st December 1991 as ....

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.... the original return must be regarded as having been substituted by the return filed on 15^th October, 1992. It was also submitted that the decisions relied upon in the show cause notice were in respect of the provisions as they existed prior to the insertion of Section 139(9) and Section 292B. Respondent no.1 was requested to treat the original return filed on 31^st December, 1991 as a valid return and rectify the intimation wherein it was stated that the return was filed on 15^th October, 1992. 4. On 6.11.1992 petitioner filed a reply in response to the notice under Section 155. Therein it was pointed out that detailed submissions had already been filed on 31^st December, 1991. It was also pointed out that on the date when the return was filed the benefit under Section 47(v) was correctly claimed and there was no question of concealment of any facts from the incometax department. It was further pointed out that there was no question of rectifying the intimation under Section 143(1)(a) because under clause (iii) of the first proviso to Section 143(1)(a) an adjustment has to be made on the basis of the information in the return or the accounts and documents accompanying the retu....

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....as invalid merely by reason of if mistake, defect or omission, if the return was in substance and effect in conformity with or according to the intent and purpose of this Act. It is not necessary to refer to some other submissions.  On the other hand, on behalf of the respondents, the learned counsel submits that the return being nonest, respondents were within their jurisdiction to issue the notice. At any rate, they submitted that the petitioner ought not to have approached this Court but awaited the final outcome of the proceedings. In these circumstances, it is submitted that the petition being premature ought to be dismissed. 6. The first question that we have called upon to answer is whether the signing of the return by the Company Secretary instead of a director as contemplated under Section 140 of the Income-tax Act, renders the return defective and or nonest. For that purpose, we may at the outset consider the law as enunciated in Commissioner of Agricultural Incometax, West Bengal v. Sri Keshab Chandra Mandal (1950) XVIII Incometax Reports 569 (SC). The Supreme Court was considering whether the declaration in the form of return of an individual assessee should be ....

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....t must be so done. Apart from that the language used in Section 140 is "Shall be signed and verified". In our opinion, therefore, the principles as laid down by the Supreme Court in Sri Keshab Chandra Mandal (Supra) will have to be applied. Such a defect, therefore, will not amount to a mere irregularity and the return filed on 31.12.1991 will have to be treated as defective. 8. Having so held, we may now consider the second contention based on Section 139(9) of the Act. Section 139(9) reads as under: "139(9). Where the [Assessing] Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act....

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....It was introduced by Taxation Laws (Amendment) Act, 1975, with effect from 1.10.1975 and reads as under: "292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act." A bare reading of this provision, makes it clear that a return of income shall not be treated as invalid merely by reason of any mistake, defect or omission in such return of income, if such return of income is in substance and effect in conformity with or according to the intent and purpose of this Act. The return of income, therefore, if not signed by signatory as contemplated by Section 140 would be mistake, defect or omission. Question is whether in spite of the defect, the return was in substance and ef....