1978 (4) TMI 83 - HC - Income Tax

Summary

Issues:
1. Interpretation of section 184(7) of the Income-tax Act, 1961 regarding the filing of a declaration in Form No. 12.
2. Validity of filing a declaration along with a revised return of income.
3. Whether the term "return of income" includes a "revised return."

Analysis:
1. The case involved a reference under section 256(1) of the Income-tax Act, 1961, for the assessment year 1963-64. The primary issue was the interpretation of section 184(7) regarding the filing of a declaration in Form No. 12 for continuation of registration by a firm.

2. The assessee firm had filed a revised return of income along with a declaration seeking continuation of its registration. The Income-tax Officer did not grant registration, leading to appeals and eventually a reference to the High Court. The Tribunal had held that the declaration filed with the revised return was valid, contrary to the revenue's argument that a declaration must accompany the original return.

3. The revenue contended that a declaration in Form No. 12 should be filed along with the original return of income, citing relevant case law. On the other hand, the assessee's counsel argued that the declaration could be filed before the assessment is completed, relying on other cases. The High Court noted that the previous decisions were not directly applicable to the current issue.

4. The High Court analyzed the language of section 184(7) and concluded that the term "return of income" should be construed to include a "revised return." The Court highlighted that filing a revised return could replace the original return for assessment purposes, and requiring a second declaration with the revised return would lead to anomalies.

5. To avoid such anomalies, the Court held that if a declaration was furnished with the original return, no further declaration was needed with the revised return. Conversely, if no declaration was submitted with the original return but was included with the revised return, it should be considered valid under clause (ii) of the proviso to section 184(7).

6. Ultimately, the High Court answered the reference question in the affirmative and in favor of the assessee, emphasizing that the term "return of income" encompassed a "revised return." The judgment was agreed upon by both judges, and no costs were awarded in the case.