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TMI Blog1987 (1) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1957 ('the Act') had not expired. The WTO, therefore, proceeded on under section 16(2) of the Act in response to which the assessee's objection was that the WTO had no jurisdiction to assess again on returns which had already been considered, assessed and disposed of. It was also contended that the returns of net wealth filed by the assessee were not under section 14 of the Act and so the belated returns filed on26-3-1979 were not legally revised returns, but merely belated returns and the period of one year could not be extended beyond31-3-1979. The WTO was, however, of the opinion that the time limit for completion of the assessment laid down by section 17A(1) was one year from the date of filing of a return or the revised return under section 15 of the Act. Section 15 permitted an assessee to file a return or a revised return at any time before the assessment was made. Section 17A(1) covered cases of both a return or a revised return. Therefore, the assessments could be made within one year of the date of filing these returns which was done on26-3-1979. He, therefore, passed the assessment orders on17-3-1980. This objection of the assessee as to the limitation has also been ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Kumar Jagadish Chandra Singh v. CIT [1982] 137 ITR 722 to the contrary. Therefore, it is a question of choice as to what view we should take in the matter. However, in view of this controversy, a Special Bench of the Tribunal decided the issue at Jaipur itself in Bohra Film Finance's case. It would be relevant to reproduce some of the observations from this decision of the Special Bench, which read as under: "However, we do not want to dilate on this aspect as that is not the question directly before us though perhaps the authorities do support the view that successive revised returns under section 139(5) can be filed. Then the other question that arose is whether the return filed under section 139(4) can be corrected and another return under section 139(4) be filed. There may be two views on this. No doubt the Calcutta High Court has stated that even the return under section 139(4) can be corrected under section 139(5) but since we do not want to adopt that view, we proceed to discuss this aspect on the basis that a return under section 139(4) cannot be revised under section 139(5). All the same whether another return under section 139(4) again can be filed or not is the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not get any period of limitation from the filing of such a return. But as long as the returns were within the period within which an assessment could be made and a return filed according to law, naturally these will be valid either as returns or as revised returns and, therefore, to that extent the ITO would be at liberty to treat such returns and make assessment within the prescribed period of limitation. The Special Bench never decided anything beyond that. 4. Coming to the Rajasthan High Court decision in Vimalchand's case the previous year had ended on31-10-1970. The returns were, therefore, to be filed by30-3-1971. No notice under section 139(2) was issued. The first return filed was on11-3-1974. The assessment of the firm was made on10-10-1974. One of the partners had filed a return on29-1-1971. Subsequently another return was filed on13-3-1974. This assessment was completed on6-11-1974. The assessee filed the first return on29-8-1971. The alleged revised return was filed on13-3-1974. The assessment was completed on6-11-1974. The AAC held that the returns filed by the assessee were no returns in the eye of law and because the period of limitation could not be extended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the technical provisions barring an assessment. It is a well established principle of law that rules of limitation since they seek to deprive the parties from their rights, should be interpreted strictly and ordinarily the right of a party to have a redress should not be taken away unless the law expressly provides for that. Now for the delay of filing of the returns or the revised returns, it is not the WTO who is to blame. At that time there was no law of limitation for making assessments. It is the assessee who failed to file the returns of the earlier years in time and delayed them. Even after filing the returns, there were other technical objections; such as, the status of then assessee, etc., over which the matter had to go to the appellate authorities. It is the assessee who ultimately filed the revised returns on26-3-1979. If the revised returns were not taken into consideration by the WTO, the assessee would have a legitimate grudge that his allegations were not looked into. If the WTO proceeded on to look into them, naturally, it would not be possible for him to complete the assessments by31-3-1979which according to the assessee would be the last date for making valid ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vasion of law. We, therefore, overrule the preliminary objection. 6. Coming to the merits, we find that although the exemption of the value of shares was not claimed by the assessee before the AAC, the shares are obviously exempt up to certain limits under clause (xxiii) of section 5(1) of the Act. Even if the assessee has failed to do so, we do not want to stand in his way inasmuch as it is the function of the taxation authorities to grant due exemptions if the assessees are ignorant of the rules. Similarly, so far as the claim under section 5(1)(iv) is concerned, for some years, the claim has to be allowed straightaway and for some years it has to be allowed if the house property was actually occupied by the assessee. The claim has not been duly considered. We direct that the WTO shall allow the claim accordingly. However, as regards the last ground, namely, 10 per cent deduction on account of big size, the figures taken by the Valuation Officer have already been disturbed by the AAC who has proceeded on to estimate the value in accordance with the rental method. Now rule 1BB of the Wealth-tax Rules, 1957 ('the Rules'), which prescribed valuation of the properties by rental met ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided in filing of the return and accordingly an assessee who had not filed his return under section 139(1) or in pursuance to notice under section 139(2) can file the return within a period of two years from the end of the assessment year in which the return was originally due. Section 153(1) provides the time limit for completion of an assessment. According to this section, the normal time limit for completion of an assessment is two years from the end of the assessment year in which the return was originally due. Sub-clause (c) of section 153(1) provides an extension of one year for completion of an assessment in cases where a return is filed under section 139(4) or a revised return is filed under section 139(5). 2. In Wealth-tax Act, section 15 has been so provided to be on a similar line as of section 139(4) and 139(5) of the Income-tax Act. The title to section 15 has been given as 'Return after due date and amendment of return'. Section 15 reads as under: "If any person has not furnished a return within the time allowed under section 14, or having furnished a return under that section discovers any omission or a wrong statement therein, he may furnish a return or a revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which necessarily would have to be corrected for which purpose he is not deprived of filing a successive return or a statement showing the correct income which has necessarily to be taken note of by the ITO before filing of the return. Now the question that arises is once the time limit has been extended by virtue of the first return which is filed belatedly, can the successive return would also entitle the extension of the time limit by one more year from the already extended time by one year. This can at best be explained by way of an illustration. Mr. 'A' should have filed a return for the assessment year say 1980-81 by30-6-1980. The normal time limit for completion of the assessment expires by31-3-1983. Mr. 'A' files the return for the first time on20-3-1983. According to section 153(1)(c) the ITO can complete the assessment on or before 20-3-1984 as he gets one year time for completion of the assessment from the date of filing of the belated return. Before completion of the assessment on20-3-1984the assessee files another return say on19-3-1984. Can the return filed on19-3-1984give a further extension of time of one year for completion of the assessment by treating the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the assessment as a consequence of an extension already granted would not result in a further extension of time for completion of the assessment. There is no bar under the statute for any person filing successive returns as many times he desires. But each such successive return cannot be treated as a belated return for the purpose of finding out the extended time for completion of the assessment. Once the return is delayed, the return is to be held to have been filed under section 139(4). Let us take the case of an assessee who for the assessment year 1980-81 files a return belatedly say on1-5-1982. According to the provisions of section 153(1)(c), the assessment could be completed on or before30-4-1983. Let us take another example where the return for the same assessment year is filed on say1-5-1981. In this case the normal period of completion of assessment expires on31-3-1983. On28-3-1983the assessee files another return which is said to be a revised return of the return already filed on1-5-1981. In this case if we apply section 153(1)(c) then the assessment on the basis of the return filed on 1st May could have been completed by30-4-1982but it could be completed by31-3- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have heard the learned counsels for the assessee as well as the department, perused the orders passed by the learned brothers and now I proceed to mention briefly the relevant facts. 3. These appeals relate to the wealth-tax assessment years 1964-65 to 1974-75. The main dispute that arose for consideration in all these appeals is the validity of reassessments made for the years 1964-65 to 1974-75. The wealth-tax returns for the first five assessment years were filed on 1-4-1969 and for later years on 6-10-1969, 24-8-1976, 16-9-1971, 29-8-1972, 16-8-1973 and 29-6-1974, respectively. These are the dates available from the order of the learned Judicial Member, which I have adopted here as there was no dispute on that issue. However, revised returns were filed for all these years on26-3-1979. The WTO initially completed the assessments on31-3-1979in the status of a HUF whereas the returns were filed in the status of individual. For that reason the assessment made were quashed by the AAC relying upon the decision of the Rajasthan High Court in the case of Ridhkaran. Thereafter the WTO proceeded to make assessments for all these years on the basis of the returns filed on26-3-1979overr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh period of limitation for making the assessment. In support thereof reliance was placed upon the judgments of the Delhi High Court in the case of O.P. Malhotra and Dr. S.B. Bhargava. Reliance was also placed upon a decision of the Special Bench of the Tribunal in the case of Bohra Film Finance and lastly upon the decision of the Rajsthan High Court in the case of Vimalchand. On the basis of these decisions, it was urged that since the original returns in respect of all the years were not filed within the precribed period under section 14(1) they were to be treated as returns filed under section 15 and since no revised return under section 15 could be filed on the analogy of the 1961 Act, those returns should be ignored. These contentions were stoutly opposed by the revenue relying upon the decision of the Calcutta High Court in the cases of Mst. Zulekha Begum (Khatoon) and Kumar Jagdish Chandra Sinha. 6. Eventually the question that turned before the Tribunal was whether the returns filed on26-3-1979could be regarded as valid returns or invalid returns. If they are valid returns, then the reassessments made on17-3-1980would be well within time and would be valid assessments but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year from the date of filing of a return or a revised return under section 15, whichever is later, where, the assessment year commencing before that date, i.e., if a revised return has been filed under section 15 a time limit of one year is available to complete the assessment. This was the reason why the question arose whether the returns filed on26-3-1979could be regarded as revised returns filed under section 15. As noticed earlier a revised return could be filed only when an omission or a wrong statement was found in the return furnished within the time allowed under section 14. 9. In these appeals the returns filed originally were already processed and assessments were made thereon but they were set aside by the AAC for being redone by the WTO. Those returns ought to have been processed by the WTO pursuant to the directions given by the appellate authority. In the meantime, the assessee no doubt filed returns on26-3-1979. Those returns were filed beyond the time prescribed under section 14. It is not known what was the provocation for filing the returns on26-3-1979. While that mystery remained unresolved, the WTO sought to take advantage of these returns and make assessments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee were no returns in the eye of law and that the period of limitation could not be extended by filing the returns under section 139(5). He opined that the assessments in question should have been completed by31-3-1974, and as the assessments were completed beyond the said time, they were a nullity. Consequently, he annulled the three assessments made by the ITO. 12. Thereafter there were appeals before the Tribunal and the Tribunal reversed the order of AAC holding that the assessment were completed within the time allowed. The view that prevailed with the Tribunal in that case was that the assessee could revise returns under section 139(5) even though a return was filed under section 139(4), i.e., not in accordance with sub-section (1) or sub-section (2) of section 139. Then the question that went before the Rajasthan High Court for its consideration was whether a return filed under section 139(4) could be treated as the same as returns filed under section 139(1) or 139(2) and whether such a return could be revised under section 139(5). The Rajasthan High Court held: "A perusal of section 139 of the Income-tax Act, 1961, shows that returns can be filed under sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Metal India Products v. CIT [1978] 113 ITR 830 (FB) and also the judgment of the Delhi High Court in the case of O.P. Malhotra. It also noticed another decision of the Allahabad High Court in the case of Dr. S.B. Bhargava. It held that it would approve of the view taken by theAllahabadand the Delhi High Courts and expressed dissent with the view taken by the Calcutta High Court. 13. It would, thus, be seen that the Rajasthan High Court noticed the conflicting judicial opinions on the subject and preferred to dissent from the view taken by the Calcutta High Court. But I find from the order of the learned Judicial Member that he preferred to follow the decision of the Calcutta High 'Court in preference to the decisions given by the Allahabad and Delhi High Courts and also in preference to the decision of the Rajasthan High Court, which was binding on him as well as the decision of the Special Bench of the Tribunal, which also by convention evolved by the Tribunal, is binding on him. 14. Since I am of the opinion that there is no material difference between the provisions of the 1957 Act and the 1961 Act insofar as the filing of returns are concerned, and that the principle of l ..... 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