A return of income shall not be invalid merely by reason of any mistake, defect, or omission if it is in substance and effect in conformity with the Income-tax Act, 1961 or according to its intent and purpose.

The following question has been referred under section 256 (1) of the Income-tax Act, 1961 (for short, the Act) at the instance of the Revenue by the Income-tax Appellate Tribunal, Gauhati Bench :

"Whether on the facts and in the circumstances of the case the Tribunal was justified in directing the Assessing Officer to treat the returns of income submitted by the assessee on 16.8.1983 for the assessment years 1978-79, 1979-80 and 1980-81 as valid returns ?"

2. The reference relates to three assessment years, 1978-79, 1979-80 and 1980-81. It is sufficient to refer to the facts relating to the earliest of the three years as the facts of the succeeding years are similar. The assessee is a public limited company. The power of attorney-holder of the company on 3.9.1979 submitted a return under section 139 of the Act. The Income-tax Officer (ITO) issued notices under sections 142 (1) and 143 (2) of the Act to the company. The notices were not complied with. On 5.3.1981 best of judgment assessment was made under section 144 in view of non-compliance with the notices. The company file j an application on 6.7.1981 for reopening under section 146 of the Act. The best of judgment assessment was cancelled on 30.9.1981. The ITO issued fresh notices under sections 142 (1) and 143 (2). The assessee complied with the notices. On 16.8.1983 the company filed fresh returns duly signed by the Director, purportedly under section 139 (5) of the Act. Assess­ment was completed on 25.8.1983 under section 144 read with section 146 of the Act by the ITO holding that the return fifed on 3.9.1979 (that is, the first return) not having been signed by the Managing Director or the Director as required under section i40 (c) is no-nest and non-existent in the eyes of law. The orders were challenged before the Commissioner of Income-tax (Appeals) (CIT (A), who confirmed the same. On further appeal by the assessee, the Appellate Tribunal held that in the circumstances of the case since the original return was signed by the power of attorney-holder; the return cannot be held to be invalid and irregularity, if any, is curable one and this irregularity was cured by submitting a return signed and verified by the Director before the assessment was completed. The Tribunal allowed the appeal. Hence this reference at the instance of the Revenue.

3. It is clear that the original returns signed by the power of attorney-holder of the company are not in accordance with the express provisions of section 140 (c), which requires that the Managing Director of a company, or where for any unavoidable reason he is not able to sign and verify the return, or where there is no Managing Director, any Director shall sign and verify the return under section 139 of the Act. At the same time it cannot be said that the power of attorney-holder is a stranger or has no knowledge about the working or accounts of the company.

4. Undoubtedly the return is defective. Section 292B protects certain returns 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 the Act. Section /.92B states, inter alia, that 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 the 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. If a return of income is in substance and effect in conformity with the Act, any defect therein cannot render it invalid. Alternatively, even if it is not in substance and effect in