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1994 DIGILAW 9 (KER)

Commissioner of Income-tax v. Yunus Kunju

1994-01-12

K.SREEDHARAN, P.K.BALASUBRAMANYAN

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Judgment :- Sreedharan, J. The Income Tax Appellate Tribunal, Cochin Bench has referred the following question to this court for its opinion under S.256(1) of the Income Tax Act, 1961, hereinafter referred to as "the Act" "Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that successive returns can be filed under S.139(4)of the I.T. Act, 1961 within the period prescribed by clause (b) of the said provision and that the I.T.O. is bound to consider these returns in framing the assessment". . 2. The short facts necessary for answering the above question are as follows. - Assessee in the instant case did not file a return under S.139(1) of the Act for the accounting year 1977-78. He was issued notice under S.139(2) of the Act dated 10-1-1979 calling upon him to file the returns. That notice was served on him on 25-1-1979. He did not comply with the notice by filing any return. Instead, he filed a return on 17-7-1980. Thereafter, within the period prescribed by S.139(4)(b)(iii) he filed another return on 17-11-1980. The Income Tax Officer refused to consider the second' return and completed the assessment on the basis of the first return filed by the assessee. Before the Commissioner of Income Tax (Appeals), the assessee challenged the action of the Income Tax Officer and contended that the second return is to be treated as a revised one and assessment to be made on its basis. Commissioner accepted that contention and quashed the order of assessment and directed the Income Tax Officer to pass fresh order of assessment on the basis of the second return. Department questioned the action of the Commissioner by preferring appeal I T. A.410 (Coch)/82 before the Tribunal. The stand taken by the Department was that second return filed by the assessee cannot be taken as a revised return under S.139(5) of the Act and that assessment should have been made only on the basis of the first return, namely the one filed on 17-7-1980. Assessee also took up the matter before the Tribunal in I.T.A. 307(Coch)/1982. According to the assessee, when the Commissioner quashed the order of assessment, which was based on the first return dated 17-7-1980, went wrong in directing the Income Tax Officer to complete the assessment on the basis of the revised return dated 17-11-1980. Assessee also took up the matter before the Tribunal in I.T.A. 307(Coch)/1982. According to the assessee, when the Commissioner quashed the order of assessment, which was based on the first return dated 17-7-1980, went wrong in directing the Income Tax Officer to complete the assessment on the basis of the revised return dated 17-11-1980. Both appeals were disposed of by the Tribunal by annexure- c order, holding: - "The CIT (Appeals) was, therefore, fully justified in asking the Income-tax Officer to complete the assessment on the basis of the second return" and rejected the contention of the assessee that the C.I.T. (Appeals) could not have restored the matter to the Income Tax Officer for passing order of assessment on the basis of the second return. 3. The Return filed R. A.427/ Coch/ 1984 praying for referring the following question to this Court: - "Whether on the facts and in the circumstances of the case the Honourable Tribunal is right in confirming the order of the learned C T 1' (Appeals) who had set aside the order of assessment completed on the basis of the first return'?" On the basis of the said application, the Tribunal referred the question quoted at the beginning of this judgment to this Court under S.256(1) of the Act. 4, Dissatisfied with the question referred, as framed by the Tribunal, the Department has preferred O.P. 10736/1985 under S.256(2) of the Act for compelling the Tribunal to refer the question in the form in which they wanted reference, namely: - "Whether on the facts and in the circumstances of the case the Hon'ble Tribunal is right in confirming the order of the learned CIT (Appeals) who had set aside the order of assessment completed on the basis of the v first return"?" If the assessee, in the instant case, was not entitled to file a second return, since he had not filed return either under S.139(1) or S.139(2), the question that is to be decided is whether his return dated 17-11-1980 can be the basis for the assessment for the year 1978-79. If it cannot be the basis for assessment, then it follows that the Commissioner's decision directing the Income Tax Officer to pass an order of assessment on the basis of the return dated 17-11-1980 must fall to the ground. If it cannot be the basis for assessment, then it follows that the Commissioner's decision directing the Income Tax Officer to pass an order of assessment on the basis of the return dated 17-11-1980 must fall to the ground. Viewed in this light, the question as framed and referred is alone to be answered on the facts and circumstances of this case. Consequently, we hold that O.P.10736/1985 is misconceived. It is accordingly dismissed. 5. Coming to the question referred to this Court under S.256(1) of the Act, we feel that the decision in Eapen Joseph v.OT (1987) 168 ITR 26 (Ker.) =1987 (2) KLT SN 43 P.3.1, will apply on all fours. In (1987) 168 ITR 26, to which one of us (SreedharanJ.) was a party, took the view that any return filed subsequent to the first one, which was filed under S.139(4), had no legal consequence. In (1987) 168 ITR 26, it was observed: "Firstly, S.139(5) of the Act permits a later or revised return to be filed only where the (original) return was filed under S.139(1) or (2) of the Act. Filing of a revised return is not contemplated under S.139(5) of the Act, in cases governed by S.139(4) of the Act. Any return filed subsequent to the filing of an original return is only a revised return. If the filing of such a revised return is not contemplated or permitted in the return filed under S.139(4) of the Act, it is not passible to say that any number of subsequent returns am be filed under S.139(4) of the Act itself . The statute expressly provides for filing a revised return (subsequent return ).under S.139(5) of the Act, only in cases where the return is filed under S.139(1) or (2) of the Act. So, it has to be held that the Act implied bars or forbids the filing of a subsequent or revised return in other cases. In this view, there cannot be any subsequent or revised return in a case where the original return is filed under S.139(4) of the Act". 6. Learned couasel representing the assessee brought to our notice a later decision of the Division Bench of the Madhya Pradesh High Court in Commissioner of Income-Tax v. Dr.N. Shrivastava, (1988) 170 ITR 556 (MP), which look a different view than the one taken by the Division Bench of this Court. 6. Learned couasel representing the assessee brought to our notice a later decision of the Division Bench of the Madhya Pradesh High Court in Commissioner of Income-Tax v. Dr.N. Shrivastava, (1988) 170 ITR 556 (MP), which look a different view than the one taken by the Division Bench of this Court. On the basis of that decision, learned counsel pleaded before us to refer the matter to a Larger Bench for final decision on the issue. But, on going through the judgment of the Madhya Pradesh High Court, we are not persuaded to take a different view than the one expressed in (1987) 168 ITR 26. We are not in a position to agree with the view taken by the Madhya Pradesh High Court because accord ing to Their Lordships there is an anomalous situation in the statute and since the said anomalous situation was not taken note of by the Legislature, the Courts will have to remedy the anomaly. This approach, we are afraid, is not proper. The Courts are not to venture to adopt Legislative process. It is to understand the la w as enacted by the Legislature. When the Legislature under two different situations provide two different modes leading to two different consequences, those modes will have to be given effect to. According to the Division Bench of the Madhya Pradesh High. Court, a person who has been compelled to file a return by a notice under-sub-section (2) of S.139 of the Act can file a revised return under sub-section (5) thereof if he discovers any omission or any wrong statement therein; but the same benefit is to be denied to a person who filed return under S.139(4) voluntarily. This is held to be an anomalous situation. It would, according to the Division Bench, be putting a person filing a voluntary return in a disadvantageous position compared to a person who has been compelled under S.139(2) of the Act to file a return. Their Lordships went on to state: - "To say that the Legislature became oblivious of this aspect of the matter with regard to a person who has filed a retime voluntarily under sub-section (4) of S.139 would be imputing unreasonableness to the legislature. We find nothing in S.139 which may justify such imputation.". 7. Their Lordships went on to state: - "To say that the Legislature became oblivious of this aspect of the matter with regard to a person who has filed a retime voluntarily under sub-section (4) of S.139 would be imputing unreasonableness to the legislature. We find nothing in S.139 which may justify such imputation.". 7. Section 139(5) specifically provides that if any person having furnished a return under sub-section (1) or sub-section (2) discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the assessment is made. This clause has been enacted after stating in clause (4) (a) that any person who has not furnished a return within the time allowed to him under sub-section (1) or sub-section (2) may, before the assessment is made, furnish the return for any previous year. When the Legislature was aware of the difference between persons who filed the return under clauses (1) and (2) and those who filed the return under S.139(4) and gives the former alone the benefit of filing revised return, the Courts are not to take the view that the same benefit is to be extended to persons who filed return under S.139(4) voluntarily. If such a view is to be taken, according to us, the Courts will be re-writing the statute, which is not within the province of the Courts. 8. In the instant case, the assesse was a regular assessee to income-tax. He ought to have filed return under S.139(1), which he did not. Notice under S.139(2) was served on him. That was also not complied with. Only thereafter he came forward with a return under S.139(4). Such an assessee is not entitled to have the right to furnish a revised return as contemplated by S.139(5) of the Act. We do not find any reason to differ from the law staled by this Court in 168 ITR 26. Further, we are bound by the said decision. Consequently, we are of the view that the Tribunal went wrong in holding that the second return is a valid return under S.139(4) of the Act for the Income-tax Officers to make the assessment basing on it. In view of what has been stated above, we answer the question referred to us in the negative, i.e. in favour of the Revenue and against the assessee. In view of what has been stated above, we answer the question referred to us in the negative, i.e. in favour of the Revenue and against the assessee. A copy of this judgment under the seal of this Court and the signature of the Registrar shall be forwarded to the Tribunal as required by law.