Delhi H.C : Whether, on the facts and in the circumstances of the case, the unsigned and unverified return filed on 13th Aug., 1973, was validated by the issue of notice under s. 143(2) of the IT Act, 1961 ?

Counsel Appeared

None, for the Applicant : R.D. Jolly, Ms. Prem Lata Bansal & Ajay Jha, for the Respondent

JUDGMENT

ARIJIT PASAYAT, C.J. :

Pursuant to direction given by this Court on an application under s. 256(2) of the IT 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 opinion of this Court : “Whether, on the facts and in the circumstances of the case, the unsigned and unverified return filed on 13th Aug., 1973, was validated by the issue of notice under s. 143(2) of the IT Act, 1961 ?”

2. Factual position, which is almost undisputed, is as follows : The assessee filed an unsigned and unverified return of income relating to asst. yr. 1973-74 on 13th Aug., 1973. It was accompanied by copies of trading account, P&L a/c, capital accounts and balance sheet together with a detailed statement of depreciation, all duly signed by a partner of the assessee. Notice under s 143(2) of the Act was issued on 24th Dec., 1973, posting the matter for 8th Jan., 1974. On the said date, an application was moved by the assessee for adjournment and the case was adjourned to 23rd Jan., 1974. On that date, the AO granted hearing to assessee. On 24th Jan., 1974, the assessee 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 assessee. Since return was filed belatedly, the ITO initiated the proceedings under s. 271(1)(a) of the Act and also charged interest under s. 139 of the Act. The assessee carried the matter in appeal before Appellate Assistant Commissioner (in short “the AAC”). Said authority rejected assessee’s stand that the return filed on 13th Aug., 1973, was a valid return. He held that since return was not signed and verified, it was a mere scrap paper. It was further observed that mere issuance of notice under s. 143(2) did not validate an invalid return. 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 13th Aug., 1973, was not a valid return under the Act. The assessee’s appeal was dismissed. Prayer was made in terms of s. 256(1) of the Act which was turned down. Subsequently, on being moved under s. 256(2), this Court directed the Tribunal to refer the question as set out above for opinion.

3. We have heard the learned counsel for the Revenue. There is no appearance on behalf of assessee in spite of service of notice. The learned counsel for the Revenue submitted that 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 s. 140 of the Act. That being the position, the fortuitous circumstance that a notice under s. 143(2) of the Act was issued, is really of no consequence. The ITO, the AAC and the Tribunal have noted as to under what circumstances the said notice under s. 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 favour of Revenue and against assessee.

The reference stands disposed of.

[Citation : 250 ITR 734]