ITAT Appeal Dismissed for Improper Verification: Lessons from Rajiv Gandhi University of Health Sciences Case

Background of the Dispute

The case of Rajiv Gandhi University of Health Sciences Vs ACIT (Exemptions) before the ITAT Bangalore exposes a crucial procedural lapse: an appeal filed without proper verification by the competent person under the Income Tax Act 1961 and the Income Tax Rules, 1962.

The assessee, Rajiv Gandhi University of Health Sciences, Bangalore, approached the ITAT against an order passed by the National Faceless Appeal Centre, Delhi (CIT(A)), dated 22.11.2023. That order had partly allowed the assessee’s appeal arising from an assessment made under Section 143(3) read with Section 142(2A) on 07.05.2018 for Assessment Year 2015-16.

However, instead of examining the substantive grounds on merits, the ITAT first scrutinized whether the appeal itself was validly instituted. The Tribunal ultimately dismissed the appeal as infructuous on the ground that it was not verified by the person legally authorised to do so, highlighting the mandatory nature of compliance with Section 140, Rule 47(1) and Rule 45(3).

Procedural Irregularities in Verification

Different Signatories at Different Stages

During the hearing of ITA No. 113/Bang/2024, the Bangalore Bench of the ITAT noticed inconsistencies in the verification of documents at various stages:

  • The appeal before the CIT(A) (Form No. 35) was verified and signed by the Finance Officer.
  • The appeal before the ITAT (Form No. 36) was verified and signed by the Assistant Registrar, Dr. Santosh C.S.
  • A copy of the revised return of income placed in the paper book (pages 11–14) also bore the signature of the Finance Officer.

This pattern raised a fundamental question: Who is the legally recognised “Principal Officer” authorised to verify the return and file appeals on behalf of the University?

Tribunal’s Query on Proper Authority

To resolve this, the ITAT turned to the statutory scheme under the Income Tax Act 1961 and asked the assessee’s representative to clarify who, in law, is empowered to verify the return of income of the University as required under Section 140.

The inconsistency between the Finance Officer signing the return and Form No. 35, and the Assistant Registrar signing Form No. 36, made it unclear whether any of these officers qualified as the “Principal Officer” under the Act.

The assessee’s Authorised Representative could not provide a satisfactory explanation for:

  • Why different officers had verified the revised return, the appeal before the CIT(A) and the appeal before the ITAT; and
  • On what legal basis those officers purported to act as the authorised verifying authority.

This failure became central to the Tribunal’s decision.

Role of Section 140 – Verification of Return

Section 140 of the Income Tax Act 1961 lays down who is competent to verify and sign the return of income for different types of assessees (individuals, companies, firms, local authorities, etc.). In the case of a body such as a university, the return is to be verified by the person recognised as the Principal Officer.

The Tribunal emphasised that determining the proper signatory for the return of income is not a mere formality – it has direct implications for the validity of any subsequent appellate proceedings.

Role of Rule 47(1) and Rule 45(3) – Signatory for Appeals

The ITAT then referred to:

  • Rule 47(1) of the Income Tax Rules, 1962, dealing with verification of appeals to the CIT(A), and
  • Rule 45(3) of the Income Tax Rules, 1962, relating to e-filing and verification of appeals.