Case Law Details
RELEVANT PARAGRAPH
13. The entire focus in the present appeal is to decide whether the returns filed by the assessee were valid or invalid or defective. Whereas the AO, on observing that the return was not properly verified in as much as it was not signed by the right person, declared it to be invalid and non-est. He further intimated the assessee vide para 5 of his communication dated 11.1.2000 that the act of wrong verification is not a rectifiable defect u/s 139(9) which provides that removal of any defect of a valid return of income. Since your Return of Income is not valid, it cannot be rectified u/s 139(9). It may be pointed out that the explanation to section 139(9) which enumerates various rectifiable defects does not include invalid rectification.’ On the contrary the stand of the assessee ab initio was that primarily the return was valid and if it was to be considered as not valid, then section 292B will come to its rescue, which will assist in making good the deficiency in the verification part of the return. It is further noted that in all the three returns filed by the assessee, original as well as revised, the signatures are done by some partner of M/s S.B. Billimoria & Co. not in his own name but as `s.b.billimoria’ in his handwriting. Further the assessee has contended before the AO that Rule 12 should not be considered but the substantive provision contained in section 140(c) will be applicable, which permits the verification of the return of income by a valid power of attorney. The A.O. held the return as invalid because it was not properly verified. The ld. CIT(A) followed the suit and upheld the action of the AO but on the ground that POA was not properly notarized and further its original was required to be filed as against the copy of POA filed by the assessee.
14. There is no dispute on the fact that the assessee executed a power of attorney in favour of the M/s S.B. Billimoria & Co. Chartered Accountants, a copy of which is available in the paper book. It authorized the said CA firm to file the return on its behalf through its partner. It is further noted that assessee did file its returns through M/s S.B. Billimoria & Co. Chartered Accountants signed by Sh. N.B. Bugwadia, its partner. But the said partner, instead of signing his own name, put initials as `s.b.billimoria’.
15. Section 140 has marginal note : “Return by whom to be signed”. Clause (a) is applicable in the case of an individual. It states that the return shall be signed by the individual himself, but where he is absent from India, by the individual himself or by some person duly authorized by him in this behalf. Sub-clause (iii) deals with a particular situation where such individual is mentally incapacitated. Sub-clause (iv) states that where, for any other reason, it is not possible for the individual to sign the return, then it shall be signed by any person duly authorized by him in this behalf. There is a proviso attached to this clause which states that in a case referred to in sub-clause (ii) or sub-clause (iv), if the person signing the return holds a valid power of attorney from the individual to do so, then it shall be attached to the return. Thus it is noted that if due to one reason or the other individual cannot personally sign the return, then an option has been given to get it signed by a valid power of attorney holder and further such POA should be attached to the return. Clause (b) of section 140 deals with the signing of the return of HUF. According to this clause the return shall be signed by the karta, and where the karta is absent from India or is mentally incapacitated from attending to his affairs , then by any other adult member of such family. The option given as per clause (a) for getting the return signed by a valid power of attorney holder is not available to HUF. The return has to be signed either by the karta himself or alternatively by any adult member in case the karta is not in position to sign under the specified circumstances. Thus it can be seen that the karta of HUF is not empowered to execute a power of attorney in favour of any one empowering such person to file the return on his behalf. Then comes clause (c) of section 140, on which the assessee has relied before the AO as applicable on it. It provides that in the case of a company, the return u/s.139 shall be signed and verified 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, then by any director thereof. The first proviso to clause (c) states that : “where a 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”. Clause (cc) of section 140 applying to a firm provides that the return shall be signed by the managing partner thereof, or where for any unavoidable reasons such managing partner is not able to sign and verify the return, or where there is no managing partner as such, by any partner thereof, not being a minor. Under this clause also there is no provision for the signing of the return by the holder of a valid power of attorney. Clause (e) states that incase of any other association, the return shall be signed and verified, by any member of the association or the principal officer thereof.
16. On going through various clauses of section 140, it is seen that whereas clause (a) and (c) contain the provision for the signing of the return by a valid power of attorney holder, other clauses do not have such provision. Thus there is a clear line of demarcation between the classes of assessees, who , in certain circumstances, can get their returns signed and verified by a the holder of valid POA, in which case such POA is required to be attached to the return and on the other hand the classes of assessees who do not enjoy such privilege. It is not permissible to a non-privileged assesse to issue POA and get his return filed through the holder of a POA. It is true that in common parlance if a person can do some work personally, he can get it done through his Power of attorney holder also. But we are dealing with section 140, in which separate categories of assesses have been made and the said general rule has been made applicable only to some of them and not all. It is obvious that the intention of the legislature is not to extend this general rule to all the classes of the assesses. If that had been the situation, then there was no need of inserting proviso to clauses (a) and (c) only but a general provision would have been attached as extending to all the classes of assessees. From the language of section 140, it can be easily noticed that only the returns of individuals and companies can be signed by a valid power of attorney holders in the specified circumstances and the other categories of the assessee are not entitled to this privilege.
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