VALIDITY OF A REVISED RETURN FILED BEYOND THE PERIOD OF LIMITATION

[DR.MARIAPPAN GOVINDARAJAN]

Revised return

Section 139 (5) of the Income Tax Act, 1961 (‘Act’ for short) provides for filing the revised return.   The said section as amended from time to time provided that if any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before 3 months prior to the end of the relevant assessment year or before the completion of the assessment.

Validity of the revised return

As per Section 139(5) the revised return filed beyond the limitation period is not valid.  The assessee cannot make any claim not claimed in the original return.  The Assessing Officer has no jurisdiction to consider the claim made by the Assessee in the revised return.  The same has been confirmed by the Supreme Court in M/S. SHRIRAM INVESTMENTS VERSUS THE COMMISSIONER OF INCOME TAX III CHENNAI - 2024 (10) TMI 313 - SUPREME COURT, Sriram Investments filed its income tax return for the AY 1989 – 90 on 19.11.1989.  On 31.10.1990 the company filed its revised return for the AY 1989 – 90.  The Department issued an intimation to the assessee on 27.08.1991.  The assessee paid the tax as per the intimation received by him from the Department.  The assessee filed another revised return on 29.10.1991. The said revised return has not been taken cognizance by the Assessing Officer.  Therefore, the assessee filed an appeal before the Commissioner of Income Tax (Appeals).  The First Appellate Authority dismissed the appeal on 21.07.1993 on the ground that the return was filed beyond the limitation period.

The assessee preferred an appeal before the Income Tax Appellate Tribunal (‘ITAT’ for short).  The ITAT allowed the appeal and remanded the matter back to the Assessing Officer.  The ITAT further directed the Assessing Officer to consider claim of the assessee in regard to the deduction of deferred revenue expenditure.  Against this order the Department filed an appeal before the High Court.  The High Court set aside the order of ITAT on the ground that there is no provision in the Income Tax Act, 1961 (‘Act’ for short) for considering the revised return filed beyond the period of limitation.

Against the order of the High Court, the assessee filed the present appeal before Supreme Court.  The appellant contended that the ITAT was rightly of the view that the assessing officer can consider claim made by the appellant regarding deduction of deferred revenue expenditure in accordance with law and the appellant was entitled to make a claim during the course of the assessment proceedings which otherwise was omitted to be specifically claimed in the return.  The appellant relied on the Supreme Court judgment in WIPRO FINANCE LTD. VERSUS COMMISSIONER OF INCOME TAX - 2022 (4) TMI 694 - SUPREME COURT.

The Department contended that after the revised return was barred by limitation, there was no question of considering the claim for deduction made by the appellant in the revised return.  The High Court was absolutely correct in coming to the conclusion that after the revised return was barred by limitation, the assessing officer had no jurisdiction to consider the case of the appellant.  The Department relied on the following judgments-

• GOETZE (INDIA) LIMITED VERSUS COMMISSIONER OF INCOME-TAX - 2006 (3) TMI 75 - SUPREME COURT 
• PRINCIPAL COMMISSIONER OF INCOME TAX-III, BANGALORE AND ANOTHER VERSUS M/S WIPRO LIMITED - 2022 (7) TMI 560 - SUPREME COURT.

The Supreme Court heard the submissions of the parties to the present appeal.  The Supreme Court analysed the judgments relied on by both the parties.  The Supreme Court also analysed the provisions of Section 139(5) of the Act.  In ‘Wipro Finance Limited’ (supra), the Supreme Court observed that the Court did not consider the question of the power of the assessing officer to consider a claim made after a revised return was barred by time.   This Court considered the appellate powers of the Tribunal under Section 254 of the IT Act. Moreover, this was a case where the department gave no objection for enabling the assessee to set up a fresh claim. 

In the above said case, the Supreme Court held that filing a revised return under section 139(5) of the Act claiming carrying forward of losses subsequently would not help the assessee. In the present case, the assessee filed its original return under section 139(1) and not under section 139(3). Therefore, the Revenue is right in submitting that the revised return filed by the assessee under section 139(5) can only substitute its original return under section 139(1) and cannot transform it into a return under section 139(3), in order to avail of the benefit of carrying forward or set-off of any loss under section 80 of the Act. The assessee can file a revised return in a case where there is an omission or a wrong statement. But a revised return of income, under section 139(5) cannot be filed, to withdraw the claim and subsequently claiming the carried forward or setoff of any loss. Filing a revised return under section 139(5) of the Act and taking a contrary stand and/or claiming the exemption, which was specifically not claimed earlier while filing the original return of income is not permissible. By filing the revised return of income, the assessee cannot be permitted to substitute the original return of income filed under section 139(1) of the Income-tax Act. Therefore, claiming benefit under section 10B (8) and furnishing the declaration as required under section 10B (8) in the revised return of income which was much after the due date of filing the original return of income under section 139(1) of the Income-tax Act, cannot mean that the assessee has complied with the condition of furnishing the declaration before the due date of filing the original return of income under section 139(1) of the Act. As observed hereinabove, for claiming the benefit under section 10B (8), both the conditions of furnishing the declaration and to file the same before the due date of filing the original return of income are mandatory in nature. 

In ‘Goetzge (India) Limited’ (supra) the Supreme Court held that the assessing officer cannot entertain any claim made by the assessee otherwise than by following the provisions of the Act.  In this case, there is no dispute that when a revised return dated 29.10.1991 was filed, it was barred by limitation in terms of section 139(5) of the Act.

The Supreme Court observed that the ITAT has not exercised its power under Section 254 of the Act.  Instead of considering the claim, the ITAT directed the Assessing Officer to consider the claim of the appellant.  The Assessing Officer has no jurisdiction to consider the claim made by the appellant in the revised return filed beyond the period of limitation, as per the directions of the ITAT.  The Supreme Court found no error in the judgment of the High Court and therefore, the Supreme Court dismissed the appeal filed by the appellant.