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TMI Blog1984 (9) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Act, 1961 ('the Act'), along with the objections of the assessee-firm to the IAC for further action. The IAC gave instructions by his order under section 144B on 21-4-1982. The same day, the ITO completed the assessment. According to the Commissioner (Appeals), the ITO completed the assessment within 180 days from 29-10-1981 and, therefore, it is within the time limit. 3. Before us, the learned counsel appearing for the assessee submitted that the order of the assessment dated 21-4-1982 is without jurisdiction inasmuch as it is barred by time and, hence, according to the assessee, the assessment is ab initio void. The crux of the submission made by the learned counsel was that the original return, which was filed on 31-3-1979, was filed neither under section 139(1) nor under section 139(2) of the Act, being beyond the time limits prescribed by the aforesaid sections. The return was one filed under section 139(4). Therefore, the revised return filed on 1-8-1980 is non est in law, because a revised return under section 139(5) can be filed only to rectify mistakes. etc., in a return filed under section 139(1) or section 139(2). If that is so, according to him, the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in O.P. Malhotra v. CIT [1981] 129 ITR 379 (Delhi). This judgment was also followed by the Allahabad High Court in Dr. S.B. Bhargava's case. In O.P. Malhotra's case, the Delhi High Court was of the view that sub-section (5) of section 139 applies only in a case where a person, having furnished a return under sub-section (1) or sub-section (2), discovered any omission or wrong statement therein. The sub-section does not refer to sub-section (4) and, therefore, does not entitle an assessee to rectify or revise a return filed under section 139(4). Accordingly, the Delhi High Court held that the return filed on 30-3-1965, being one under section 139(4), a revised return could not be filed under section 139(5) and the return filed on 28-3-1966 was invalid in law. 7. On the other hand, the learned departmental representative pointed out that the assessee can file any number of returns under section 139(4). Therefore, according to him, the second return filed on 1-11-1980 is not invalid in law, and if that is so, according to him, the assessment order passed on 21-4-1982 is not barred by limitation. He relied upon a judgment of the Calcutta High Court in Kumar Jagadish Chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn to be filed and proceeds to assess thereunder without any objection from the assessee, it would not be open to the assessee to contend later that the return filed subsequently was invalid. Therefore, the Calcutta High Court held that the subsequent return filed by the assessee was a valid return under section 139(4) and the assessment made thereunder was within the time prescribed under section 153 of the Act. 9. Again, the learned departmental representative attempted to support his view by placing reliance on the judgment of the Supreme Court in CIT v. Kulu Valley Transport Co. (P.) Ltd. [1970] 77 ITR 518. In that case, the Supreme Court held by the majority judgment that section 24(2) of the Indian Income-tax Act, 1922 ('the 1922 Act'), conferred benefit to the assessee, whereby losses incurred in a particular year could be set off and carried forward to a subsequent assessment year. There was no provision in section 22 of the 1922 Act, under which losses had to be determined for the purpose of section 24(2). Section 22(2A) simply laid down that in order to obtain the benefit of section 24(2), the assessee must submit his return showing loss within the time specified by se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case, if following the Delhi High Court's view, the revised return is held to be non est, limitation would have set in, it does not follow that this is the view which has to be construed as favourable to the assessees in general. The rule of interpretation canvassed for by the learned counsel, therefore, does not help us in deciding the present case. We have to decide the case in the light of the judgments of the various High Courts relied on by the parties. We have already set out the reasoning of the Calcutta High Court in the case of Kumar Jagadish Chandra Sinha, which we repeat as under : "...Sub-section (5) is a part of section 139. The statute itself provides for the filing of a revised return. Section 143 does not specifically deal with the return filed either under sub-section (1) or sub-section (2) or sub-section (4) of section 139. It deals generally with the return filed under section 139. It is true that sub-section (5) specifically mentions sub-section (1) or sub-section (2) but does not mention the case of a return filed under sub-section (4) of section 139. However, the true purport of a return filed under sub-section (5) is that it substitutes the original r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 4,16,289 and the ITO had initiated penalty proceedings for non-payment of tax under section 140A of the Act and levied a penalty of Rs. 50,000 by his order dated 20-9-1980. Subsequent to this, the firm filed a revised return claiming bad debts of Rs. 1,13,274 in the accounts for the period 1-10-1976 to 30-6-1977 and Rs. 56,567 in the accounts for the earlier period 1-7-1976 to 30-9-1976. The details of bad debts were furnished before the ITO. It was represented before him that most of the amounts were less than Rs. 1,000 and in all those cases, either the party was disputing the charging of interest or was not traceable. The remarks made by the ITO on some of the items are as under : --------------------------------------------------------------------------------------------------------------------------------------------------- Amount Name and address Remarks Rs. --------------------------------------------------------------------------------------------------------------------------------------------------- 10,900 Ganesh Yarn Trading Co., Paid bank commission for Chirala hundi drawn on him for party not in existence. 6,969 Suvarnapudi Suryanarayana, Guravapalam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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