High Court Of Allahabad
CIT vs. Rudra Bilas Kisan Sahkari Chini Mills
Section 2(35), 72, 140
Asst. Year 1979-80
R.K. Agrawal & Prakash Krishna, JJ.
IT Appeal No. 268 of 1991
3rd February, 2005
Counsel Appeared :
Shambhu Chopra, for the Applicant : None, for the Respondent
JUDGMENT
By the court :
The Tribunal, New Delhi, has referred the following question of law under s. 256(1) of the IT Act, 1961 (hereinafter referred to as ‘the Act’), for opinion to this Court :
“Whether, on facts and in the circumstances of the case, the Tribunal was justified in law in holding that the return signed by Mr. K.K. Varshney was a valid return as he acted as an agent of the assessee and also in further holding that the loss claimed therein should have been considered in correct perspective ?”
2. The reference relates to the asst. yr. 1979-80. Briefly stated the facts giving rise to the present case are as under : The respondent-assessee is a co-operative society. It is being assessed to income-tax in the status of AOP. It had filed return on 30th June, 1979, showing loss to Rs. 1,33,10,000 which was within the stipulated period under ss. 139(1) and 139(3) of the Act. The assessment was completed under s. 144 of the Act for non-compliance of notices under ss. 142(1) and 143(2) which was cancelled under s. 146 of the Act. After cancellation of assessment under s. 146 of the Act and before completion of fresh assessment, a revised return was filed on 14th Oct., 1985, showing a loss of Rs. 1,34,99,761. The fresh assessment was completed on 24th March, 1986 and in that assessment, the ITO computed the loss at Rs. 34,97,856. However, he refused to direct to carry forward the loss as the return originally filed on 30th June, 1979 was not a valid return because it was not signed by appropriate person as provided under s. 140. He however, allowed depreciation of Rs. 92,37,063 to carry forward as unabsorbed depreciation as per rules. Feeling aggrieved the respondent preferred appeal before the CIT(A) who did not accept the plea for carry forward of the losses. Still feeling aggrieved the respondent preferred second appeal before the Tribunal. The Tribunal after hearing the submission advanced by the parties and also taking into consideration the material and evidence on record had held that the return was signed by the agent and, therefore, it is valid return. Accordingly it directed for carry forward of the losses also. It may be mentioned here that the return which was filed on 30th June, 1979, was signed by Sri K.K. Varshney, accounts executive of the respondent-society. When asked to give proof that the principal officer (general manager) was not in a position to sign the return and the power had been given to him to sign the return in absence of the principal officer, it was submitted as follows : “On the last day of June 1979, the transfer order of the then principal officer, Sri D.N. Tripathi, PCS, was received from the State Government as per Radiogram No. 545/I/II-16/19/79, dt. 30th June, 1979 and he was relieved of his charge on 6th July, 1979. The principal officer was under transfer on the last day of June, 1979, when he was busy on out-door duty also. The principal officer was not available in the office and as such the return could not be signed by him under the facts detailed hereinabove and, therefore, the same was filed by the person concerned incharge as per normal practice existing with the mill society in the relevant period.” There was no written authority given by the principal officer i.e., general manager to Sri K.K. Varshney for signing the return on his behalf. Heard Sri Shambhu Chopra, learned standing counsel for the Revenue. No body appeared on behalf of the respondentassessee.
Learned standing counsel submitted that the return which was filed on 30th June, 1979, under the signatures of Sri K.K. Varshney, cannot be treated as valid return in the eyes of law inasmuch as it has not been signed by the principal officer and further there was nothing in writing to show that Sri Varshney had been appointed as an agent of the society. He submitted that if the return filed by the assessee on 30th June, 1979, is ignored then the revised returned filed on 14th Oct., 1985, cannot be treated as valid return and, therefore, the respondent cannot be allowed to carry forward the losses against the income of future years. The submission is misconceived. Sec. 140 of the IT Act provides person who can sign the return. In the case of association it has been provided in cl. (e) that the return can be signed by any member of the association or principal officer thereof. The principal officer has been defined under s. 2(35) of the Act, which reads as under : “2(35) ‘Principal Officer’, used with reference to a local authority or a company or any other public body or any AOP or any BOI, means— (a) the secretary, treasurer, manager or agent of the authority, company, association or body, or (b) any person connected with the management or administration of the local authority, company, association or body upon whom the AO has served a notice of his intention of treating him as the principal officer thereof;”
From the reading of the aforesaid provision it is clear that the return can be signed by the agent also. The question is whether in absence of any written authorization, the return signed by Sri K.K. Varshney can be treated as a return signed by him in the capacity of an agent of the society or not. It is well-settled principle that any person can appoint an agent orally or in writing or agency can be inferred by implication also. In the present case we find that there is no authorization either oral or in writing. However, authorization to sign the return by Sri Varshney is to be inferred by implication. It is not in dispute that the principal officer, i.e., general manager who is an officer to Provincial Civil Service of the State of UP had been transferred on 30th June, 1979. He was busy with the winding up of affairs and further when revised return was filed under the signatures of the principal officer, the date of filing of original return i.e., 30th June, 1979 had been mentioned. It may be stated that in the IT return there is a specific column for giving date and receipt number of filing the original return which is sought to be revised. Thus, by conduct the respondent society had accepted the return filed under the signatures of Sri K.K. Varshney and, therefore, by implication it would be treated as having been signed in the capacity as agent of the general manager, i.e., the principal officer. It is further submitted that the Tribunal has referred to a paragraph of Halsbury’s Laws of England regarding “Agent” which is reproduced as under : “‘Agent of necessity’, agency of necessity arises wherever a duty is imposed upon a person to act on behalf of another apart from contract and in the circumstances of emergency, in order to prevent irreparable injury, it may also arise where a person carries out the legal or moral duties of another in the absence or default of that other, or acts in his interest to preserve his property from destruction (3rd Edn. Vol-1 p. 157).” The aforesaid paragraph is fully applicable to the present case.
5. In view of the foregoing discussion, we do not find any legal infirmity in the order. We accordingly answer the question referred to us in affirmative i.e., in favour of the assessee and against the Revenue. There shall be however, no order as to costs.
[Citation : 280 ITR 249]
