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1996 DIGILAW 276 (PAT)

Satyabhama Thakur v. Commissioner Of Income Tax

1996-04-22

D.P.WADHWA, SUDHANSU JYOTI MUKHOPADHAYA

body1996
Judgment 1. The Income-tax Appellate Tribunal, Patna Bench, Patna, referred to this court under Sec. 256(1) of the Income-tax Act, 1961 (for short "the Act"), the following two questions of law for its opinion : " (i) Whether, a revised return can be filed when a return has been filed under Sec. 139(4) of the Income-tax Act, 1961 ? (ii) If the answer to the above question is in affirmative, whether the assessment made on the basis of the return filed by the assessee on March 21, 1978, was a valid assessment ?" 2. For the assessment year 1975-76, the assessee filed her return of income on November 4, 1975, under Sec. 139(4) of the Act. She filed a revised return of income on March 21, 1978. Assessment was completed cm March 9, 1979, on the revised return of income. On appeal, the Appellate Assistant Commissioner set aside the assessment as invalid and directed the Income-tax Officer to complete the assessment de novo. On further appeal before the Tribunal, the only contention raised by the assessee was that when the original return was filed under Sec. 139(4) of the Act, she was not entitled under law to file a revised return and the assessment made on March 9, 1979, was time barred keeping in view the original return filed under Sec. 139(4) of the Act. 3. Under Sub-sec. (5) of Sec. 139, a revised return can be filed if the return had been filed either under Sub-sec. (1) or (2) of Sec. 139. We may reproduce Sub-sections (4) and (5) of Sec. 139 as under : " (4). (a) Any person who has not furnished a return within the time allowed to him under Sub-sec. (1) or Sub-sec. (2) may, before the assessment is made, furnish the return for any previous year at any time before the end of the period specified in Clause (b), and the provisions of Sub-sec. (a) Any person who has not furnished a return within the time allowed to him under Sub-sec. (1) or Sub-sec. (2) may, before the assessment is made, furnish the return for any previous year at any time before the end of the period specified in Clause (b), and the provisions of Sub-sec. (8) shall apply in every such case ; (b) the period referred to in Clause (a) shall be - (i) where the return relates to a previous year relevant to any assessment year commencing on or before the 1st day of April, 1967, four years from the end of such assessment year ; (ii) where the return relates to a previous year relevant to the assessment year commencing on the 1st day of April, 1968, three years from the end of the assessment year ; (iii) where the return relates to a previous year relevant to any other assessment year, two years from the end of such assessment year." " (5) If any person having furnished a return under Sub-sec. (1) or Sub-sec. (2), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the assessment is made." Sec. 153 provides for time limit for completion of assessments and Clause (c) of Sub-sec. (1) relevant for the assessment year 1975-76 is as under : " (1) No order of assessment shall be made under Sec. 143 or Sec. 144 at any time after--. . . (c) the expiry of one year from the date of the filing of a return or a revised return under Sub-sec. (4) or Sub-sec. (5) of Sec. 139, whichever is latest." 4. Thus, the contention of the assessee, in brief, is that since the assessment was not completed within one year of November 4, 1975, the assessment was barred by limitation. The Tribunal did not agree with the contention of the assessee and on an application filed under Sub-sec. (1) of Sec. 256 of the Act by the assessee referred the two questions of law to this court for its opinion. 5. This question has been considered in various High Courts and there is a divergence of opinion. The High Courts of Allahabad (Dr. (1) of Sec. 256 of the Act by the assessee referred the two questions of law to this court for its opinion. 5. This question has been considered in various High Courts and there is a divergence of opinion. The High Courts of Allahabad (Dr. S. B. Bhargava V/s. CIT [1982] 136 ITR 559 ; O. P. Malhotra V/s. CIT [1981] 129 ITR 379 (Delhi) ; Eapen Joseph V/s. CIT [1987] 168 ITR 26 (Ker) and Vimalchand V/s. CIT [1985] 155 ITR 593 (Raj) have taken the view canvassed before us by the assessee while the High Courts of Kumar Jagdish Chandra Sinha V/s. CIT [1982] 137 ITR 722 (Cal), CIT V/s. Dr. N. Shrivastava [1988] 170 ITR 556 (MP) and Nanjappa Textiles V/s. CIT [1985] 153 ITR 109 (Mad) have taken the view in favour of the Revenue. 6. Our attention has been drawn to an instruction (Instruction No. 888), issued by the Central Board of Direct Taxes under Sec. 119 of the Act. This instruction was published in C. B. D. T. Bulletin (Technical) Volume XXI of October to December, 1975 --(CBDT F. No. 243 /15/75-A and PAC-II, dated the October 1, 1975). It is under this instruction that the income-tax authorities under the Act have referred to the opinion of the Law Ministry, Government of India, that an assessee who has filed his return of income under Sec. 139(4) of the Act is not entitled to file a revised return under Section 139(5) of the Act. There is ample authority for the proposition that the instruction issued under Sec. 119 of the Act is binding on the income-tax authorities. That being the position, the revised return filed by the assessee in the present case under Sub-sec. (5) of Sec. 139 of the Act is non est and no such assessment can be based on that. We may reproduce Instruction No. 888, and the opinion of the Ministry of Law, which formed part of this instruction ;- "Instruction No. 888 XX/1/97 -- Returns of income filed under Sec. 139(4) of the Income-tax Act, 1961--Whether can be revised under Sec. 139(5)--Whether extended time limit under Sec. 153(1)(c) be available in respect of such returns of income-Clarification regarding. We may reproduce Instruction No. 888, and the opinion of the Ministry of Law, which formed part of this instruction ;- "Instruction No. 888 XX/1/97 -- Returns of income filed under Sec. 139(4) of the Income-tax Act, 1961--Whether can be revised under Sec. 139(5)--Whether extended time limit under Sec. 153(1)(c) be available in respect of such returns of income-Clarification regarding. A question has been raised as to whether a person who has filed a belated return of income under Sec. 139(4) of the Income-tax Act, 1961, is entitled thereafter to file a revised return of income under Sec. 139(5) of the Act. A related question is whether in such a case the time limit for completion of assessments laid down in Sub-clause (c) of Sub-sec. (1) of Sec. 153 of the Act will apply with reference to the belated return filed under Section 139(4) or the revised return under Sec. 139(5). 2. These questions were referred to the Ministry of Law for advice. According to the Ministry of Law, a person who has not filed a return of income within the time allowed to him under Sub-sec. (1) or Sub-sec. (2) of Section 139 of the Act, but files a return of income under Sec. 139(4) is not entitled to file a revised return under Sec. 139(5) of the Act. The Law Ministry has further advised that such a return of income cannot be taken into consideration for the purpose of computing the period of limitation under Sec. 153(1)(c) of the Act. It may, therefore, be noted that the extended time limit of one year under Sec. 153(1)(c) will not be available in respect of a revised return of income purported to have been filed under Sec. 139(5) where originally the return was filed under Sec. 139(4). A copy of the advice of the Ministry of Law is enclosed. 3. The above legal position may kindly be brought to the notice of all the officers working in your charge. Opinion of the Ministry of Law, dated November 22, 1974. In File No. 201/20/74-IT (A. II). The right to file a revised return arises under Sub-sec. (5) of section 139. That Sub-sec. expressly gives that concession only to those who have filed a return under Sub-sections (1) and (2). Opinion of the Ministry of Law, dated November 22, 1974. In File No. 201/20/74-IT (A. II). The right to file a revised return arises under Sub-sec. (5) of section 139. That Sub-sec. expressly gives that concession only to those who have filed a return under Sub-sections (1) and (2). This concession would also be available to those who file returns under Sub-sections (3) and (4A) because, it is expressly provided therein that the provisions of the Act will be applicable to the returns filed thereunder, as if they were filed under Sub-sec. (1). But, Sub-sec. (4) does not contemplate the filing of more than one return. In any case, if it was contemplated that even those who have filed returns under Sub-sec. (4) should be able to file a revised return, there was nothing to prevent the Legislature to say so in Sub-sec. (5) itself or state in Sub-sec. (4) that the provisions of the Act will apply to the return filed thereunder as if it was a return under Sub-sec. (1), as has been done in Sub-sections (3) and (4A). 2. It is true that in sec. 153(1)(c), the words return or revised return have been used. But, in the context, it seems to me that the word return is used with reference to Sub-sec. (4) and the expression revised return is used with reference to Sub-sec. (5). This seems to be the appropriate way of construing sec. 153(1)(c) of the Act. (CBDT. F. No. 243/13/75-A & PAC-II, dated 1st October, 1975)." 7. We have examined the decisions of the High Courts referred to above in detail and keeping in view the instruction of the Central Board of Direct Taxes mentioned above, we are of the opinion that no revised return can be filed under Sub-section (5) of sec. 139, when the return has been filed under Sub-sec. (4) of sec. 139 of the Act. 8. Sub-sec. (5) of sec. 139 refers to furnishing of a revised return of income, if a person has furnished a return under Sub-sec. (1) or Sub-sec. (2) thereof. When this Sub-sec. specifically refers to filing of a revised return only where returns have been furnished either under Sub-sec. (1) or Sub-section (2) of sec. 139, this provision of filing a revised return cannot be extended to Sub-sec. (4) of sec. 139. (1) or Sub-sec. (2) thereof. When this Sub-sec. specifically refers to filing of a revised return only where returns have been furnished either under Sub-sec. (1) or Sub-section (2) of sec. 139, this provision of filing a revised return cannot be extended to Sub-sec. (4) of sec. 139. Any other interpretation would mean that the person who has filed his return under Sub-sec. (4) can go on filing revised returns one after the other and there would be no time limit to complete the assessment. In any case, the court cannot read Sub-sec. (4) in Sub-section (5) of sec. 139 when reference under Sub-sec. (5) for filing of a revised return only pertains to returns filed under Sub-sec. (1) or Sub-section (2) of sec. 139. Clause (c) of Sub-sec. (1) of sec. 153 refers to the return that is filed under Sub-sec. (4) and to the revised return that is filed under Sub-sec. (5) of sec. 139. We will, therefore, agree with the view taken by the High Courts of Allahabad, Delhi, Kerala and Rajasthan. 9. Accordingly, we answer the first question in the negative and in favour of the assessee. In this view of the matter, the second question becomes redundant. There will be no order as to costs.