The Judgment of the Court was delivered by

Ajit K. Sengupta, J.:— In this reference under section 256(2) of the Income-tax Act, 1961, the following question of law has been referred to this court:

“Whether, on the facts and in the circumstances of the case and on a proper interpretation of sections 140(c) and 292B of the Income-tax Act, 1961, the Tribunal was justified in law in holding that the return of income filed on February 14, 1978, over the signature and verification of Mr. N.L Kanodia, a director, was invalid?”

2. Shortly stated, the facts are that for the assessment year 1977-78, the assessee-company filed a return of income on February 14, 1978. The return was signed and verified by one Shri N.L Kanodia, director-cum-general manager of the company. Since this verification was not in accordance with the provision of section 140(c), the Income-tax Officer sent a letter to the managing director of the company pointing out the provision of section 140(c). It was further pointed out that in case the managing director was unable to sign the return due to any unavoidable reason the return of income could be signed by any other director. The managing director was required to let the Income-tax Officer know whether he was prevented from signing the verification due to any unavoidable reason. On January 28, 1980, the assessee-company submitted a fresh return duly verified by the company's managing director. Along with the return, the assessee-company filed a letter dated January 24, 1980, stating that the return filed on February 14, 1978, was signed by Shri N.L Kanodia because Shri K.P Modi was not available and that Shri Kanodia, being a director, was competent to sign the return. The Income-tax Officer found that neither the assessee-company nor its managing director had indicated that Shri K.P Modi was prevented from signing the return due to any unavoidable reason. The Income-tax Officer held that the return filed on February 14, 1978, was not properly verified and hence it was invalid. The return filed by the assessee on January 28, 1980, was held to be the first valid return.

3. The matter was carried in appeal before the Commissioner of Income-tax (Appeals), who on a consideration of the facts of the case, held that it is difficult to arrive at a finding that the managing director was unable to sign and verify the order of the Income-tax Officer and treated the first return as invalid.

4. The assessee thereafter appealed to the Tribunal. After considering the submissions made on behalf of the parties and having regard to the facts of the case and the requirement under section 140(c), the Tribunal found that the Commissioner of Income-tax (Appeals) was justified in not accepting the claim of the assessee on this point, particularly when the assessee had not given any specific reason before the Income-tax Officer as to why the return was not signed by the person concerned.

5. At the hearing before us, Mr. Sukumar Bhattacharjee, learned advocate appearing for the assessee, contended that the Income-tax Officer was not justified in holding that the first return which had been filed was not an invalid return in view of the fact that the then managing director was prevented, by sufficient cause, from signing the return. Secondly, if the return was defective it was the duty of the Income-tax Officer to allow an opportunity to the assessee to rectify the defect and that was not done and, thirdly, there was sufficient compliance with the requirements of law and as such the authorities should have invoked the provisions of section 292B to hold that the return was not invalid.

6. Mr. Sunil Mitra, learned advocate for the Revenue, has contended to the contrary.

7. We have considered the rival contentions. In our view, none of the contentions raised by Mr. Bhattacharjee has any substance. Section 140(c) provides that in the case of a company the return of income shall be signed by the managing director thereof, or where for any unavoidable reason such managing director is not able to sign and verify the return, by any director thereof. Thus, it is obligatory on the company to have its return signed and verified by the managing director thereof and only in a case where for any unavoidable reason such managing director is not able to sign and verify the return, can any other director of the company sign and verify the return. In this Case the return which was originally filed had been verified by one Niranjan Kanodia, general manager of the assessee-company. Since this verification was not in accordance with the provisions of section 140(c) of the Act, the Income-tax Officer addressed a letter dated February 28, 1979, to the managing director of the assessee-company drawing his attention to the provisions of section 140(c). He, further pointed out that in case the managing director was unable to sign the return due to any unavoidable reason the return of income could be signed by another director. In the said letter, the Income-tax Officer requested the managing director of the company to let him know whether he was prevented from signing the verification on February 14, 1978, due to any unavoidable reason. He further pointed out that if there was no such cause, the return of income would be invalid and in that event a duly signed and verified return should be filed.

8. On January 28, 1980, the assessee-company submitted a fresh return duly signed and verified by the managing director of the assessee-company. Along with such return, the assessee-company filed a letter dated January 24, 1980, signed by an assistant general manager that the return filed on February 14, 1978, had been signed by N.L Kanodia because K.P Modi was not available and that the said N.L Kanodia being a director was competent to sign and verify the return of income but neither the assessee-company nor its managing director indicated that K.P Modi was prevented from signing and verifying the return due to any unavoidable reason. The Income-tax Officer also took into account that no reason was given by the then managing director who did not sign and verify the return originally filed on February 14, 1978. The first return was not properly verified. No explanation was given by the assessee-company and furthermore the first return was marked “provisional” and the assessee-company submitted a fresh and duly verified return on January 28, 1980, which was treated to be a valid return.

9. From the facts narrated hereinbefore, it would be evident that the Income-tax Officer afforded an opportunity to the assessee-company to either specify the reason why the first return was not signed and verified by the managing director or to file a fresh return.

10. Mr. Bhattacharjee relied on the provisions of section 139(9) of the Act. The said sub-section (9) was inserted by the Finance (No. 2) Act, 1980, effective from September 1, 1980. Therefore, the new provision would apply in relation to the return of income filed on or after September 1, 1980, whether for the assessment year 1980-81 or any earlier or later assessment year. But in this case, the’ first return was filed on February 14, 1978, and the second return was filed on January 28, 1980. Therefore, the question of application of section 139(9) would not apply. Even if subsection (9) was applicable, this sub-section empowered the Income-tax Officer to call upon the assessee to rectify a defect in the return. A return of income has to be regarded as defective only if it contains any of the defects referred to in Explanation to section 139(9). In other words, the provisions of section 139(9) will not be applicable in the case of returns which do not contain any of the specified defects. For the purpose of subsection (9), a return of income shall be regarded as defective unless the following conditions are fulfilled:

(a) the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in.

(b) the return of income is accompanied by the following, namely:

(i) a statement showing the computation of the tax payable on the basis of the return;

(ii) the proof of the tax, if any, claimed to have been deducted at source and the advance tax and tax on self-assessment, if any, claimed to have been paid;

(iii) the proof of the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974;

(iv) where regular books of account are maintained by an asses-see,—

(1) copies of the manufacturing account, trading account, profit and loss account or income and expenditure account or any other similar account and balance-sheet;

(2) in the case of a proprietary business or profession, the personal account of the proprietor; in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members; and in the case of partners or members of a firm, association of persons or body of individuals, also their personal account in the firm, association of persons or body of individuals;

(v) where the accounts of the assessee have been audited, copies of the audited profit and loss account and balance-sheet and a copy of the auditor's report;

(vi) where regular books of account are not maintained by the assessee, a statement indicating the amounts of turnover or gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, as also of the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year

11. Thus, the provision makes a distinction between a defective return and an invalid return. A defective return is not ipso facto to be regarded as an invalid return. It is only when a return contains any of the specified defects and the Income-tax Officer, in his discretion, intimates the defect to the assessee and the assessee fails to rectify the same within the specified period, that Income-tax Officer may treat the return as an invalid return. Thus, the first return which was not signed and verified by the managing director was not a defective return as contested by Mr. Bhattacharya, it was an invalid return-in the absence of any explanation.

12. In this connection, a reference may be made to section 292B of the Act which came into force from October 1, 1975. It, inter alia, provides that no return of income shall be invalid merely by reason of any mistake, defect or omission, if such return is, in substance and effect, in conformity with or according to the intent and purpose of the Act. Section 292B has been inserted to provide against purely technical objections without substance coming in the way of the validity of the assessment proceedings. In the instant case, the original return was invalid as it was not signed and verified by the person competent to do so. It may be mentioned that the provision in section 139(9) would override the other provisions of the Income-tax Act including section 292B in a case where any of the specified defects is not removed within the time allowed, in which case the return shall be treated as an invalid return. Even assuming that the assessee-company was entitled to a notice of the defect in the return, such notice was given by the Assessing Officer, which the assessee-company did not avail of and the defect was not removed. Therefore, the first return Was rightly treated as an invalid return.

13. Having regard to the facts and circumstances of this case, we are of the view that the first return filed by the assessee-company on February 14, 1978, was invalid. We, therefore, answer the question in this reference in the affirmative and in favour of the Revenue.

14. There will be no order as to costs.

Shyamal Kumar Sen, J.:— I agree.