COMMISSIONER OF INCOME-TAX Vs. KRISHAN LAL GOYAL

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short "the Appellate Tribunal"), has, at the instance of the Commissioner of Income-tax, Amritsar-II, Amritsar, referred the following question of law for our opinion :

(2.) THE factual back-drop giving rise to this question may be noticed :

(3.) ON May 22, 1968, Dr. Krishan Lal Goyal, an individual assessee, submitted a return of his income for the assessment year 1968-69, The ITO completed the assessment under Section 143 (1) of the Income-tax Act, 1961 (for short " the Act "), on May 23, 1968, on the basis of this return. On January 22, 1969, the assessee filed an application under Section 154 of the Act, stating therein that the income-tax return filed by him (on which the assessment order was passed) was unverified and mostly unfilled and as such it was no return in the eye of law. Section 139 of the Act and Rule 12 (1) of the Income-tax Rules, 1962 (hereinafter referred to as "the Rules"), lay down that every return must be verified in the manner indicated therein. Since the assessment was based on a return which was no return in the eye of law, the ITO committed a grave mistake in framing the assessment. This mistake was apparent on the face of the record. It was prayed that the same may be rectified and orders of assessment be cancelled. The ITO, vide his orders dated August 16, 1974, rejected this application mainly on the ground that though the return had not been verified by the assessee, yet annex. ' A ' showing details of salaries, annex. ' G ' showing computation of total income and page 23, indicating the details of annuity deposits, statement of salary and profession, annex. ' B ', as well as the statement of capital marked ' C ' had been duly signed by the assessee. These indicate that the assessee had duly signed the various statements in the return as well as the statements annexed thereto. The omission on the part of the assessee to sign the verification does not make the return invalid. On appeal, the AAC accepted the contention of the assessee. He held that since the assessment had been framed on an invalid return, it was not valid in law. There was a mistake apparent in the assessment order. He allowed the appeal and rectified the mistake and cancelled the assessment order. The appeal by the Revenue failed and this order of the AAC was affirmed by the Appellate Tribunal, vide orders dated February 19, 1976. It was observed that the Department had not cited any authority in support of the proposition that an unverified return of total income could form the basis of a valid assessment. Relevant statutory provision of the Act as they stood at the relevant time may be noticed at this stage: