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Issues Involved:
1. Validity of the return filed under section 139(4) and the right to file a revised return under section 139(5). 2. Time-limit for assessments under section 153(1)(b). 3. Applicability of penalty provisions under section 271(1)(c). Issue-wise Detailed Analysis: 1. Validity of the Return Filed Under Section 139(4) and the Right to File a Revised Return Under Section 139(5): The Tribunal held that a return filed voluntarily before the completion of an assessment but after the end of the relevant assessment year cannot be treated as a return under section 139(1) or section 139(2). Such returns are only returns under section 139(4). The Tribunal further noted that section 139(5) allows for the filing of a revised return only by persons who have furnished a return under section 139(1) or section 139(2). Therefore, a person filing a return under section 139(4) is debarred from furnishing a revised return. This interpretation is based on the differentiation made by the legislature in splitting section 22(3) of the Indian Income-tax Act, 1922, into sections 139(4) and 139(5) of the Income-tax Act, 1961. However, the High Court disagreed with this interpretation, stating that section 143 does not specifically deal with returns filed under section 139(1), section 139(2), or section 139(4), but generally with returns filed under section 139. The Court emphasized that once a return is filed under section 139(4), it cannot be ignored, and the revised return should be treated as a substitution of the original return. This position follows from the Supreme Court's decision in CIT v. Ranchhoddas Karsondas [1959] 36 ITR 569, which established that the Revenue cannot ignore a return filed before the assessment is made. 2. Time-limit for Assessments Under Section 153(1)(b): The Tribunal observed that section 153(1)(c) refers to the date of filing of a return or a revised return under section 139(4) or section 139(5), suggesting that it is possible to file both a return and a revised return under these subsections. However, the Tribunal concluded that a revised return cannot be filed under section 139(4). The High Court upheld the Tribunal's view that the assessment made on the basis of the revised return filed under section 139(4) was valid and within the time-limit prescribed under section 153(1)(b). 3. Applicability of Penalty Provisions Under Section 271(1)(c): The Tribunal noted that the penalty proceedings for the assessment years 1964-65 and 1965-66 were initiated based on the detection of prima facie concealment of income. The Tribunal found that the notices issued under section 274/271(1)(c) were not frivolous and were based on the detection of capital gains not disclosed in the original returns filed. The High Court agreed with the Tribunal's conclusion that the initiation of penalty proceedings under section 271(1)(c) was justified. The Court emphasized that the act of concealment is complete at the time of filing the first return, and subsequent disclosure does not obliterate the offence committed. Conclusion: - Question No. 1: Answered in the negative and in favor of the Revenue. - Question No. 2: Answered in the affirmative and in favor of the Revenue. - Question No. 3: Answered in the affirmative and in favor of the Revenue. In the facts and circumstances of the case, parties will pay and bear their own costs.
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