Electrical Instrument Company vs Commissioner Of Income-Tax
2000 Latest Caselaw 1293 Del

JUDGMENT

Arijit Pasayat, C.J.

1. Pursuant to a direction given by this court on an application under Section 256(2) of the Income-tax Act, 1961 (in short "the Act"), the following question has been referred by the Income-tax Appellate Tribunal, Delhi Bench-D (in short "the Tribunal"), for the opinion of this court :

"Whether, on the facts and circumstances of the case, the unsigned and unverified return filed on August 13, 1973, was validated by the issue of notice under Section 143(2) of the Income-tax Act, 1961 ?"

2. The factual position, which is almost undisputed, is as follows :

The assessed filed an unsigned and unverified return of income relat-ing to the assessment year 1973-74 on August 13, 1973. It was accompanied by copies of the trading account, profit and loss account, capital accounts and balance-sheet together with a detailed statement of depreciation, all duly signed by a partner of the assessed. Notice under Section 143(2) of the Act was issued on December 24, 1973, posting the matter for January 8, 1974. On the said date, an application was moved by the assessed for adjournment and the case was adjourned to January 23, 1974. On that date, the Assessing Officer granted hearing to the assessed. On January 24, 1974, the assessed filed another return which was duly signed and verified, accompanied by various statements, other than those enclosed to the return filed earlier, duly signed by a partner of the assessed. Since the return was filed belatedly, the Income-tax Officer initiated proceedings under Section 271(1)(a) of the Act and also charged interest under Section 139 of the Act. The assessed carried the matter in appeal before the Appellate Assistant Commissioner (in short "the AAC"). The said authority rejected the assessed's stand that the return filed on August 13, 1973, was a valid return. He held that since the return was not signed and verified it

was a mere scrap paper. It was further observed that mere issuance of notice under Section 143(2) did not validate an invalid return. The matter was carried in appeal before the Tribunal. Taking note of the factual aspects highlighted, it was held by the Tribunal that return filed on August 13, 1973, was not a vaiid return under the Act. The assessed's appeal was dismissed. Prayer was made in terms of Section 256(1) of the Act which was turned down. Subsequently, on being moved under Section 256(2) of the Act, this court directed the Tribunal to refer the question as set out above for opinion.

3. We have heard learned counsel for Revenue. There is no appearance on behalf of the assessed in spite of service of notice. Learned counsel for the Revenue submitted that the return which was not signed and verified had no sanctity in the eyes of law and the authorities have rightly refused to take notice thereof.

4. The return which was filed first was obviously not signed and verified. These are the basic requirements of law under Section 140 of the Act. That being the position, the fortuitous circumstance that a notice under Section 143(2) of the Act was issued, is really of no consequence. The Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal have noted as to under what circumstances the said notice under Section 143(2) was issued. Issuance of such a notice did not validate an invalid return. That being the position, our answer to the question referred is in the negative, in favor of the Revenue and against the assessed.

5. The reference stands disposed of.