Verification of Income Tax Returns Under Section 265 of the Income Tax Act, 2025: Who Is Authorized and Why It Matters

Introduction

One of the most procedurally critical — yet frequently overlooked — aspects of income tax compliance is the proper verification of the return of income. Under the newly enacted Income Tax Act, 2025, Section 265 (which corresponds to Section 140 of the Income Tax Act, 1961) governs who is legally authorized to verify a return of income for different categories of assessees. A return that is verified by an unauthorized person is not merely irregular — it may be treated as an invalid return altogether, with serious downstream consequences for the assessee.

This article provides a detailed breakdown of the verification framework under Section 265 of the Income Tax Act, 2025, explains the practical implications of improper verification, and discusses how the same principles extend to appeal memos filed before the CIT(A) and ITAT.

What Is Verification of Return and Why Does It Matter?

When an assessee files a return of income, the return must be signed and verified by a specific authorized individual as prescribed under the statute. This verification is not a mere formality — it is a legal requirement that lends validity to the return. Without proper verification, the Assessing Officer (AO) is empowered to treat the return as non-est (invalid), effectively as though no return was filed at all.

The consequences of an invalidated return can be severe:

• Loss carry-forward claims may be denied, as carry-forward of losses is generally permitted only when a valid return has been filed within the due date.
• Refund claims embedded in the return may be rejected or indefinitely delayed.
• Scrutiny proceedings may proceed on the assumption that no valid return was filed, exposing the assessee to best judgment assessments.

Important: The AO or CPC (Centralized Processing Centre) has the authority to invalidate a return where verification has not been done by the person specified under Section 265 of the Income Tax Act, 2025.

Section 265 of the Income Tax Act, 2025 — Category-Wise Authorized Verifiers

Section 265 of the Income Tax Act, 2025 sets out a structured table identifying who is authorized to verify returns for each category of assessee. The following is a comprehensive breakdown:

1. Individual Assessee

2. Hindu Undivided Family (HUF)

• The Karta of the HUF is the primary authorized verifier.
• Where the Karta is outside India, any other adult member of the HUF may verify the return.

3. Company

4. Limited Liability Partnership (LLP)