Income-tax---

----Return---Company---Rectification of mistakes---Return of company not signeperson mentioned in S.140---Defect curable under S.292-B---Rectification proceedings under S.154 to declare return non est are not valid---Indian Income Tax Act, 1961, Ss. 140, 154 & 292-B.

A return can be signed and verified only as provided for, in section 140(c) of the Income Tax Act, 1961. In the case of a company, a return under section 139 is to be signed and verified as per section 140(c) between April 1, 1962, and March 31, 1976, by the principal officer. With effect from April 1, 1976, in, the case of a company, the return is to, be signed and verified by the Managing Director himself or where for any unavoidable reason such Managing Director is not able to sign and verify the return or where there is no Managing Director, by any Director thereof. It is well-settled that if, a statute provides for a thing to be done in a particular manner, then it is to be done in that manner and in no other manner. Section 292B provides that no return of income shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income if it is in substance and effect in conformity with, or according to the intent and purposes of the Act. Section 139 also throws some light on the question. If there is any defect, the Assessing Officer is required to give an opportunity to the assessee to rectify the defect within a stipulated time.

Return was filed on July 27, 1988, by the assessee, a public limited company. The said return was signed by a person not named under section 140 of the Act in relation to "company". Notice was issued under section 154 of the Act to the assessee stating that since its return was not signed by the person permitted to sign it in terms of section 140(c) of the Act, the return was non est, and all proceedings taken on the basis of that return were void ab initio. Such notice was issued for the years 1988-89 and 1989-90. The assessee filed its objection stating that the return was filed by a person who was authority to do so on the basis of a power of attorney. The Assessing Officer did not accept the assessee's contention and treated the return to be non est. The matter was carried in ;appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) rejected the contention of the assessee that in view of section 292B, a return cannot be questioned if it was in substance and effect in conformity with the intent and purpose of the Act. The assessee moved the Tribunal, which accepted that section 292B of the Act took care of the situation and action under section 154 of the Act was not warranted. On a reference:

Held, that the question whether section 292E of the Act applied to the facts of a case was a question of law. That being the position, the Tribunal was justified in its conclusion about the non-applicability of section 154. The Tribunal was right and section 292B was applicable.

Balaram (T.S.), ITO v. Volkart Bros. (1971) 82 ITR 50 (SC); Chandra Kishore Jha v. Mahavir Prasad (1999) 7 JT 256 (SC); Commissioner of Agrl. I.T. v. Sri Keshab Chandra Mandal (1950) 18 ITR 569 (SC); Har Narain Textiles (P.) Ltd. v. CIT (1985) 47 CTR 326 (All.); ITO v. Asok Textiles Ltd. (1961) 41 ITR 732 (SC); Master Construction Co. (P.) Ltd. v. State of Orissa (1966) 17 STC 360 (SC); Nazir Ahmad v. King-Emperor AIR 1936 PC 253; Rao Shiv Bahadur Singh v. State of Vindhya Pradesh AIR 1954 SC 322; Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137; Shanmugam (K.M.) v. S.R.V.S. (P.) Ltd. AIR 1963 SC 1626; State of U.P. v. Singhara Singh AIR 1964 SC 358 and Venkatachalam (M.K.) ITO v. Bombay Dyeing and Manufacturing Co. Ltd. (1958) 34 ITR 143 (SC) ref.

P. K. R. Menon and N. R. K. Nair for the Commissioner.

Nemo for the Assessee.

JUDGMENT

ARIJIT PASAYAT, C.J.---The Income-tax Appellate Tribunal, Cochin Bench (in short, "the Tribunal"), has referred the following question for opinion of this Court under section 256(1) of the Income Tax Act, 1961 (in short "the Act"):

"Whether, on the facts and in the circumstances of the case, the applicability or otherwise of section 292B of the Act is a debatable question to rule out the application of, section 154 of the Act?"

The dispute relates to the assessment year 1989-90 and arises in the following undisputed factual background: A return was filed on July 27, 1988, by the assessee, a public limited company. The said return was signed by a person not named under section 140 of the Act in relation to "company". Notice was issued under section 154 of the Act to the assessee stating that since its return was not signed by the person permitted to sign it in terms of section 140(c) of the Act, the return was non est, and all proceedings taken on the basis of that return are void ab initio. Such notice was issued for the years 1988-89 and 1989-90. The assessee filed its objection stating that the return was filed by a person who was authorized to do so on the basis of a power of attorney.

The Assessing Officer did not accept the assessee's contention and treated the return to be non est. The matter was carried in appeal before the Commissioner of Income-tax (Appeals) (in short "the CIT(A)"). The Commissioner of Income-tax (Appeals) rejected the contention of the assessee that in view of section 292(b) a return cannot be questioned if it was in substance and effect in conformity with the intent and purpose of the Act. The assessee moved the Tribunal, who, by order dated April 4, 1995, accepted that section 292(b) of the Act took care of the situation and action under section 154 of the Act was not warranted. On being moved under section 256(1) of the Act, the reference, as indicated above, has been made.

Learned counsel for the Revenue submitted that the return being non est, there was no question of any doubt about the applicability of section 154 and it cannot be termed to be a disputable question to rule out the application of section 154 of the Act. There is no appearance on behalf of the assessee, in spite of notice.

In order to appreciate the contentions raised, it would be appropriate to refer to certain provisions, more particularly sections 140(c), 154 and 292B of the Act. Section 140(c) reads as follows:

" 140. The return under section 139 shall be signed and verified---...

(c) in the case of a company, by the Managing Director thereof, or where for any unavoidable reason such Managing Director is not able to sign and verify the return, or where there is no Managing Director, by any Director thereof:

Provided that where the company is not resident in India, the return may be signed and verified by a person who holds a valid power of attorney from such company to do so, which shall be attached to the return:

Provided further that,---

(a) where the company is, being wound up, whether under the orders of a Court or otherwise, or where any person has been appointed as the receiver of any assets of the company, the return shall be signed and verified by the liquidator referred to in subsection (1) of section 178;

(b) where the management of the company has been taken over by the Central Government or any State Government under any law, the return of the company shall be signed and verified by the principal officer thereof; "

Section 154 reads thus:

"154(1) With a view to rectifying any mistake apparent from the record an Income-tax Authority referred to in section 116 may,---

(a) amend any order passed by it under the provisions of this Act;

(b) amend any intimation sent by it under subsection (1) of section 143, or enhance or reduce the amount of refund granted by it under that subsection.

(lA) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in subsection (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that subsection in relation to any matter other than the matter which has been so considered, and decided.

(2) Subject to the other provisions of this section, the authority concerned-

(a) may make an amendment under subsection (1) of its own motion, and

(b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee, and where the authority concerned is the Deputy Commissioner (Appeals) or the Commissioner (Appeals) by the Assessing Officer also.

(3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this section unless the authority concerned has given notice to the assessee of its intention so to do and has allowed the assessee a reasonable opportunity of being heard.

(4) Where an amendment is made under this section, an order shall be ' passed in writing by the Income-tax Authority concerned.

(5) Subject to the provisions of section 241, where any such amendment has the effect of reducing the assessment, the Assessing Officer shall make any refund which may be due to such assessee:

(6) Where any such amendment has the effect of enhancing the assessment or reducing a refund - already made, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable; and such notice of demand shall be deemed to be issued order section 156 and the provisions of this Act shall apply accordingly.

(7) Save as otherwise provided in section 155 or subsection (4) of section 186, no amendment under this section shall be glade after the expiry of four years from the end of the financial Year in which the order sought to be amended was passed."

Section 292B of the Act reads;

"292-B. 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."The first question that needs to be adjudicated is regarding the requirement of section 140(c) of the Act. The common law "qui facit per alium facit per se" governs the matter of signatures by persons. That principle says that what a man can do himself can equally well be done by his duly authorized agent. It is well settled that unless there is a specific provision of .law requiring the signatures and verification of the assessee himself, the signature, etc., may be validly affixed by the constituted attorney. A return can be signed and verified only as provided for in section 140(c) of the Act. In the case of a company, a return under section 139 is to be signed and verified as per section 140(c) between April, 1962, and March 31, 1976, by the principal officer. With effect from April 1, 1976, in the case of a company, a return is to be signed and verified by the Managing Director himself or where for any unavoidable reason such Managing Director is not able to sign and verify the return, or where there is no Managing Director, by any Director thereof. It is a well-settled salutary principle that if a statute provides for a thing to be done in a particular manner, then it is to be done in that manner and in no other manner (see Nazir Ahmad v. King-Emperor AIR 1936 PC 253; Rao Shiv Bahadur Singh v. State of Vindhya Pradesh AIR 1954 SC 322; State of U.P. v. Singhara Singh AIR 1964 SC 358 and Chandra Kishore Jha v. Mahavir Prasad (1999) 7 JT 256 (SC). Therefore, a return which is not signed and verified is non est. The Supreme Court in Commissioner of Agrl. LT. v. Sri Keshab Chandra Mandal (1950) 18 ITR 569 held that a return, in order to be valid, has to be signed by the individual himself. If a statute requires personal signature of a person, which includes a mark, the signature or the mark must be that of the person himself. But this follows only when it is permissible for the agent to sign the name of the principal. Signature includes a mark. The use of the words "himself" or "by him" or "under his hand" or "personally" indicate that even an authorized agent is precluded from signing on behalf of the principal. The proviso to section 140(c) of the Act states that where the company is not resident in India, the return may be signed and verified by a person who holds a valid power of attorney from such company to do so; where the company is being wound up, whether under the orders of a Court or otherwise, or where any person has been appointed as the receiver of any assets of the company, the return shall be signed and verified by the liquidator and where the management of the company has been taken over by the Central Government or any State Government under any law, the return shall be signed and verified by the principal officer thereof. In Keshab Chandra Mandal's case (1950) 18 ITR 569 (SC), it was clarified that the Court was not dealing with the question whether it was proper for the Assessing Officer to proceed with the assessment without giving the assessee an opportunity to put his mark as the return in that case was signed by an anent of the illiterate assessee. However, it was observed in that case by one of the Judges that the Assessing Officer should have called upon the assessee to put his mark on the return and that appears to indicate that the absence of proper signature or verification is a curable one and the assessee must have an opportunity to rectify it. Section 292B provides that no return on income shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income if it is in substance and effect in conformity with or according to the intent and purpose of the Act. Section 139 also throws some light on the question. If there is any defect the Assessing Officer is required to give an opportunity to the assessee to rectify the defect within a stipulated time.

In the aforesaid background, it has to be seen whether section 154 applies to a case of this nature. In order to bring in application of section 154, the mistake must be one which is apparent from the record. As was observed by the apex Court in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137, where an error is far from self-evident, it ceases to be an apparent error. The apex Court in Master Construction Co. (P.) Ltd. v. State of Orissa (1966) 17 STC 360 expressed the view that an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or, law. It is to be noted that the language used in section 154 is different from Order. XLVII, rule 1, of the Code of Civil Procedure, 1908 (in short, "the Code"), Language of the two is different, because according to section 154, the power is given to the various Income-tax Authorities to rectify any mistake "apparent from the record" and in the Code, the words are "an error apparent on the face of the record", and the two provisions do not mean the sale thing. The power of the officers mentioned in section 154 to correct `any mistake apparent from the record" is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an "error apparent on the face of the record" (see (T.S.) Balaram, ITO v. Vokart Bros. (1971) 82 ITR 50 (SC)). "Mistake" is an ordinary word, but in taxation law, it has a special signature. It is not an arithmetical or clerical error alone that comes within its purview. A mistake which can be rectified must be a mistake from the record. It may be a mistake either of law or of fact (see M.K. Venkatachalam, ITO v. Bombay Dyeing and Manufacturing Co. Ltd. (1958) 34 ITR 143 (SC) and ITO v. Asok Textiles Ltd. (1961) 41 ITR 732 (SC)). A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of-reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record (see Satyanarayan Laxminarayan Hegde's case AIR -1960 SC 137). If a statutory provision is capable of two interpretations, taxing one such interpretation cannotgive rise to an error apparent from the record even if one is of the view that the other interpretation was more correct in the context. The principle is not always easy of application as. was emphasized by the Supreme Court in Shanmugam (K.M.) v. S.R.V.S. (P.) Ltd. AIR 1963 SC 1626. It was also observed by the Supreme Court in that case that the concept comprised many imponderables and it was not capable of precise definition because no objective criterion could be laid down, the apparent nature of an error, to a large extent, being dependent upon the subjective element. It depended, however on the facts and circumstances of each case. The plain meaning of the word "apparent" is that it must be something which appears to be so ex facie and is incapable of argument or debate.

It has been urged by learned counsel for the Revenue that since the signature by an unauthorized person rendered the return non est, it was not return for any purpose. The question of there being a defect needing rectification does not arise. We do not find any substance in this plea. If there is no defect, the question of the return becoming non est does not arise. The signature of the unauthorized person renders the return defective to make it non est. "Defect" means, a blemish, fault or imperfection. It is a lack of something necessary for completeness or perfection. The question whether section 292B of the Act applies to the facts of a case is the question of law (see Har Narain Textiles (P.) Ltd. v. CIT (1985) 47 CTR 326 (All.)).

The above being the position, the Tribunal was justified in its conclusion about the non-applicability of section 154. We answer the question, as refrained, in the affirmative, in favour of the assessee and against the Revenue.

M.B.A./724/FC Reference answered.