2012 (8) TMI 184 - AT - Income Tax

Whether revised return u/s 139(5) of the Act was nonest - in original return of income, filed within time, the assessee has shown positive income while in the revised return the assessee as shown positive income from business but a huge loss under income from other sources which has resulted in negative income Held that - Revised return is a loss return which should have been filed within the time specified u/s 139(3) of the Act - loss return filed beyond the time limit prescribed u/s 139(3) of the Act was null and void - claim of the assessee for the loss return is also not acceptable and even if it is found to be genuine, then such loss in this year cannot be allowed to be carried forward to subsequent year for set off as the loss return was not filed within the time specified u/s 139(3) of the Income-tax Act - revised return of income is nonest against assessee

Summary

Issues:
1. Consideration of revised return filed by assessee u/s 139(5) of the Income-tax Act.
2. Treatment of losses claimed in revised return.
3. Applicability of Rule 7A of the Income-tax Rules, 1962.

Analysis:
1. Consideration of revised return filed by assessee u/s 139(5) of the Income-tax Act:
The appeal before the Appellate Tribunal was against the Commissioner of Income-tax's order confirming the Assessing Officer's decision that the revised return filed by the assessee u/s 139(5) of the Income-tax Act was invalid. The Tribunal noted that the original return did not claim any loss to be carried forward, and hence, the revised return under sub-sec. (5) of sec. 139 was questioned. The Tribunal referred to the provisions of sub-sec. (5) of sec. 139 and emphasized that the revised return can only be filed in case of an omission or wrong statement in the original return due to a 'bonafide' inadvertence or mistake by the assessee. The Tribunal concluded that the revised return claiming losses for multiple assessment years could not be accepted as the assessee should have filed the return u/s 139(3) initially if the losses were to be carried forward. Therefore, the Tribunal upheld the decision that the revised return was null and void.

2. Treatment of losses claimed in revised return:
The Tribunal analyzed the requirements of filing a loss return under sec. 139(3) of the Income-tax Act and the implications of filing a revised return under sec. 139(5). It noted that the assessee's claim of discovering the omission to claim losses subsequently was not considered bonafide as the assessee had knowledge of the losses from previous years. The Tribunal held that the revised return claiming losses for multiple years cannot be entertained if the original return did not reflect such claims initially. The Tribunal emphasized that the revised return cannot replace the original return if the conditions under sec. 139(5) are not met. Therefore, the Tribunal dismissed the appeal, stating that the decisions relied upon by the assessee were not applicable to the facts of the case.

3. Applicability of Rule 7A of the Income-tax Rules, 1962:
The Tribunal discussed the applicability of Rule 7A of the Income-tax Rules, 1962 in the assessment proceedings. It differentiated the current case from previous decisions where Rule 7A was considered, highlighting that in the present case, the revised return filed by the assessee was not valid. The Tribunal clarified that the assessee's claim under Rule 7A in the revised return could not be considered since the revised return itself was deemed null and void. Therefore, the Tribunal dismissed the appeal, emphasizing the inapplicability of Rule 7A due to the invalid revised return.

In conclusion, the Appellate Tribunal dismissed the assessee's appeal, upholding the decision that the revised return filed by the assessee u/s 139(5) of the Income-tax Act was invalid and could not be accepted. The Tribunal emphasized the importance of adhering to the specified provisions for filing revised returns and carrying forward losses, ultimately affirming the decisions of the lower authorities in this case.