1984 (9) TMI 9 - HC - Income Tax

Summary

Issues Involved:
The issues involved in this case are whether the return filed under section 139(5) is a valid return and whether the subsequent return filed under section 139(5) replaces the original return filed under section 139(1) and has to be disposed of by assessment of the fresh return.

Validity of Return under Section 139(5):
The case involved a situation where the assessee initially filed a return under section 139(1) showing a net profit, but later filed a revised return under section 139(5) with a different income amount and status. The Income-tax Officer rejected the revised return, stating that the accounts were originally maintained on a mercantile basis and could not be changed to a cash basis after a significant period of time. The Appellate Tribunal upheld this decision, emphasizing that the revised return did not fall within the scope of section 139(5) as there was no omission or wrong statement in the original return. The Tribunal ruled that the assessee could not rewrite the accounts on a different basis and rejected the revised return under section 139(5).

Interpretation of Section 139(5):
Section 139(5) allows a person to file a revised return if any omission or wrong statement is discovered in the original return filed under sub-section (1) or sub-section (2). In this case, the assessee did not claim any omission or wrong statement in the original return but sought to change the basis of accounting from mercantile to cash. The Tribunal correctly held that the assessee could not rewrite the accounts when they were originally maintained on a particular basis during the accounting year. Therefore, the Tribunal's decision that the return filed under section 139(5) was not a valid return was upheld.

Conclusion:
The High Court upheld the Tribunal's decision that the return filed under section 139(5) was not valid as there was no omission or wrong statement in the original return to warrant a revised filing. Consequently, it was deemed unnecessary to address the issue of whether the subsequent return under section 139(5) replaces the original return. The Court directed the parties to bear their own costs in this matter.