1998 (10) TMI 45 - HC - Income Tax

Summary

Issues Involved:
1. Whether the return of income filed by the petitioner was defective under section 139(9) of the Income-tax Act.
2. Whether the Assessing Officer was justified in treating the return as invalid and non-est.
3. Whether the Commissioner of Income-tax was correct in rejecting the revision petition and confirming the Assessing Officer's order.
4. Whether the petitioner was entitled to condonation of delay in payment of tax and furnishing proof thereof.

Issue-wise Detailed Analysis:

1. Defective Return under Section 139(9):
The petitioner filed a return of income on October 31, 1995, without accompanying proof of tax payment under section 140A. The Assessing Officer issued a notice under section 139(9) pointing out the defect and allowed time for rectification. The petitioner failed to rectify the defect within the stipulated time. The court held that a return of income based on self-assessment must be accompanied by proof of tax payment if due and payable, failing which the return is defective under section 139(9). The return filed by the petitioner was thus defective.

2. Treatment of Return as Invalid and Non-est:
The Assessing Officer passed an order on March 13, 1996, treating the return as invalid and non-est due to the non-payment of tax and non-furnishing of proof thereof. The court upheld this action, stating that failure to rectify the defect within the allowed period renders the return invalid as per the fiction created by law under section 139(9). The proviso to section 139(9) allows the Assessing Officer to condone the delay and treat the return as valid before the assessment is made, but this discretion was not exercised in favor of the petitioner.

3. Rejection of Revision Petition by Commissioner of Income-tax:
The petitioner filed a revision petition to the Commissioner of Income-tax, which was rejected on February 3, 1997. The Commissioner confirmed the Assessing Officer's order, stating that the return was rightly declared invalid due to non-compliance with section 140A. The court agreed with the Commissioner, noting that the petitioner did not seek an extension of time from the Assessing Officer as required under section 139(9). The Commissioner was only concerned with the legality and propriety of the order dated March 13, 1996, and could not entertain a new prayer for extension of time.

4. Condonation of Delay in Payment of Tax:
The petitioner argued that the tax was eventually paid before the assessment was made, and hence, the delay should be condoned. However, the court found that the tax payments were made after the return was invalidated and no prayer for condonation was made to the Assessing Officer. The court emphasized that the jurisdiction to grant an extension of time and condone the delay is expressly conferred on the Assessing Officer by section 139(9). The Commissioner, in revision, could only examine the legality or propriety of the Assessing Officer's order and not entertain a new prayer for condonation.

Conclusion:
The court dismissed the petition, maintaining the orders dated March 13, 1996, by the Assessing Officer and January 31, 1997, by the Commissioner of Income-tax. The petitioner failed to seek an extension of time from the Assessing Officer as required under section 139(9), and thus, no fault was found with the impugned orders. The petition was dismissed with no order as to costs.