2017 (12) TMI 584 - HC - Income Tax

Entitlement to deduction u/s 10BA - denial of claim on the premises that on account of revised return filed by the appellant, it had not claimed exemption u/s 10BA - whether return filed u/s 139(5) is revised return and return filed on 7.5.2008 Annexure-5 can be allowed to be withdrawn vide letter dt. 7.9.2009? - Held that - On a close reading of Sub-Sec.(5) of Sec.139, it is very clear that the legislature has given a chance to the assessee to check his position within one year or before the end of the relevant assessment, whichever is earlier. Since, the period was expired but for the year the assessee has taken his position and withdrawn his claim after that position is taken. Sec.139(5) is very clear that the assessee could not have withdrawn the claim, having withdrawn the same by filing revised return. It is only open for the department to accept it or not to accept it. Having taken advantage of the position of claiming benefit u/s 139(5) and to avoid penalty, in our considered opinion, it is not desirable to allow any party to blow hot and cold. If the tribunal decision would not have been in his favour, the assessee could not have contended that this is nonest. Even if the department would have denied that this is nonest, he would have contested the matter. Revised return was not permissible and revised return of revised return is not thought of by the legislature. Thus, u/s 139(5) once return is filed after the period of limitation which is prescribed under the Act, the position of the assessee is very clear that he cannot do it. It is only for the department to take the call whether to accept or not. On the point of Sec.80A (5), in our considered opinion the return which is claimed under consideration not of return which he has filed. In that view of the matter, the contention of Mr. Pathak that the revised return alongwith the earlier return ought to have been considered, in our considered opinion, the return which is referred in 80A(5) is to be considered which is filed for the relevant year under consideration of the AO and not of the return which he stated and he cannot claim any benefit of the same. - Decided in favour of the department and against the assessee.

Issues Involved:
1. Deduction under Section 10BA of the Income Tax Act.
2. Validity of the revised return filed under Section 139(5) of the Act.
3. Applicability of Section 80A(5) of the Act concerning the revised return and original return.

Detailed Analysis:

1. Deduction under Section 10BA of the Income Tax Act:
The primary issue was whether the assessee was entitled to a deduction under Section 10BA of the Income Tax Act. The tribunal had previously ruled in favor of the assessee for earlier assessment years, but the claim was withdrawn in the revised return for the assessment year 2007-08 to avoid penalty proceedings. The tribunal's decision in favor of the assessee led to the withdrawal of the revised return and a request to consider the original return for the deduction. The court noted the settled law that there can be no estoppel against law, and if a claim is legitimately allowable, it must be allowed even if withdrawn earlier.

2. Validity of the revised return filed under Section 139(5) of the Act:
The court examined whether the revised return filed under Section 139(5) was valid. The assessee argued that the revised return was nonest as there was no omission or wrong statement in the original return, and it was filed only to avoid penalties. The court referred to various judgments, including the Supreme Court's decision in Mahendra Mills, which emphasized that a revised return replaces the original return and becomes the basis for assessment. The court concluded that once a revised return is filed, the original return is substituted, and the revised return is considered for assessment purposes.

3. Applicability of Section 80A(5) of the Act concerning the revised return and original return:
Section 80A(5) stipulates that if a deduction is not claimed in the return of income, it cannot be allowed later. The assessee contended that the claim should be considered based on the original return. However, the court held that the return referred to in Section 80A(5) is the one under consideration by the Assessing Officer, which, in this case, was the revised return. The court emphasized that the revised return, having been filed under Section 139(5), could not be disregarded, and the claim for deduction under Section 10BA was not admissible as it was not included in the revised return.

Conclusion:
The court dismissed the appeal, holding that the revised return filed under Section 139(5) was valid and replaced the original return. Consequently, the assessee's claim for deduction under Section 10BA, which was not included in the revised return, could not be entertained. The court affirmed that the provisions of Section 80A(5) were applicable, and the claim had to be made in the return under consideration by the Assessing Officer, which was the revised return in this case.

← Previous Next →