The Income Tax Act, 1961 provides a structured legal framework to ensure that taxpayers comply with their obligations. One such important provision is Section 140 of Income Tax Act, which lays down rules about “Return by whom to be signed.” Filing of income tax returns is not just about uploading details of income and deductions; it also requires authentication from an authorized person. This ensures that the information furnished is true, accurate, and legally binding. In simple terms, Section 140 clarifies who has the authority to sign a return, depending on whether the assessee is an individual, company, partnership firm, or another type of entity.
Purpose of Section 140
The main purpose of Section 140 is to bring accountability in return filing. The law recognizes that different taxpayers may have different legal capacities. For example, an individual can sign their own return, but in the case of a company, it is usually the Managing Director or any other authorized director who signs. Similarly, when the assessee has passed away, the legal heir steps in. This section ensures there is no ambiguity in responsibility when it comes to filing returns and paying self-assessment tax. It also acts as a safeguard to ensure that returns are verifiable and legally enforceable.
Who Can Sign Under Section 140?
Section 140 clearly outlines who must sign the income tax return:
- Individual Assessee – The individual signs the return. If the individual is mentally incapacitated, their guardian or another competent person may sign.
- HUF (Hindu Undivided Family) – The Karta normally signs. In the Karta’s absence, any other adult member of the family may sign.
- Company – The Managing Director signs the return. If the MD is unavailable, another director may do so.
- Partnership Firm – The managing partner signs; if unavailable, any other partner may do so.
- LLP – The designated partner is responsible.
- Local Authority / Political Party / AOP / BOI – The Principal Officer or Chief Executive signs.
- Legal Representative – In case of the assessee’s death, the return is signed by the legal heir.
This broad framework ensures that returns are filed with the correct authority and that the assessee shall be liable to pay such tax as declared in the return.
Section 140 and Self-Assessment Tax
Another important aspect of Section 140 is the linkage with self-assessment tax under Section 140A. While Section 140 deals with “who” should sign, Section 140A emphasizes “what” needs to be paid before filing. The law requires taxpayers to ensure that the full liability, including interest and fees, is cleared at the time of return filing. This means that when you or an authorized signatory signs the return, you are also declaring that all dues are paid. Without paying self-assessment tax, the return may not be valid, and penalties can follow.
Also Read: Why Paying Self-Assessment Tax is Non-Negotiable
Legal Importance of Signature
The signature on an ITR is not just a formality. It serves as legal proof that the assessee (or authorized signatory) accepts responsibility for the information furnished. In fact, courts have held that an unsigned return is not considered valid. Thus, Section 140 of Income Tax Act plays a crucial role in determining the validity of an ITR. Whether it is an individual, company, or trust, the signatory becomes the point of accountability in case of incorrect reporting or tax disputes.
Electronic Verification and Section 140
With the government’s push towards digitalization, the concept of a “signature” has expanded to include electronic means. Today, an assessee can use Digital Signature Certificates (DSCs), Aadhaar OTP-based verification, or net banking login to sign their return. Even though the method of verification has evolved, the principle of Section 140 remains unchanged – someone must authenticate the return, and the law specifies who that person is. This has made compliance easier while still maintaining the legal sanctity of the process.
Penalties for Non-Compliance
If an income tax return is filed without being signed by the authorized person, it is treated as invalid. This can lead to penalties and legal consequences. The assessee shall be liable to pay such tax along with interest and penalty if the return is defective. Additionally, delays in filing due to such technical lapses may attract further consequences under Sections 234F (late filing fee) and 271F (penalty for failure to furnish return). Hence, proper understanding of Section 140 is critical.
Practical Examples
- Case 1: Individual Assessee – Rajesh files his ITR but due to illness, his father signs on his behalf as his guardian. This is valid under Section 140.
- Case 2: Company Return – ABC Pvt. Ltd. files its return. The Managing Director is abroad, so another director signs with proper authorization. This too is valid.
- Case 3: Deceased Assessee – A taxpayer passes away during the year. His son, being the legal heir, files and signs the return, paying outstanding taxes.
These examples show how Section 140 of Income Tax Act ensures continuity and accountability even in different scenarios.
Also Read: A Unique Way to Save Taxes and Build Wealth
Why Section 140 Matters for Taxpayers
For taxpayers, Section 140 is more than just a procedural requirement. It establishes trust between the taxpayer and the department by ensuring that the return is authenticated. It also protects the government’s interest by holding the signatory liable for any misrepresentation. In today’s compliance-driven environment, ignoring who should sign the return can lead to serious issues. Hence, every assessee should be aware of this section while filing.
Conclusion
To sum up, Section 140 of Income Tax Act plays a pivotal role in ensuring that income tax returns are filed with proper authorization. It identifies the right person who must sign the return, whether it is an individual, company, firm, or legal heir. It also ties in with paying self-assessment tax, ensuring that tax liabilities are cleared before signing. This section provides clarity, reduces disputes, and makes the return legally valid.
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