9911796707
TMI Blog1982 (1) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... was also enclosed. The ITO further noted in the assessment order that on 6-10-1979 a return, noted as "revised" under section 139(5), was filed, showing the status as a firm while declaring an income of Rs. 19,048. He further noted that no reasons were given for the revised return. The balance sheet accompanying the revised return was superscribed "books maintained on cash basis". Before the ITO, the assessee claimed that a revised return was filed due to change of accounting system from mercantile to cash. The ITO noted that it was clear that the change of the system was subsequent to the filing of the first return. He noted that the accounts were closed and adjusted and the statutory return of income was filed on the basis of the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count books. He examined the details of purchases and sales 3 to 6 that realisations of bills were made within reasonable time, i.e., months. Thus, he found that the contention of the assessee that the change of mercantile to cash basis was on account of commercial expediency, was not proper and it was an afterthought. 4. As far as the propriety of the revised return is concerned, the AAC discussed the findings of the ITO. He noted that the accounts were properly closed and adjusted, and that there was no omission or wrong statement occurring therein vis-a-vis the mercantile method of accounting regularly followed by the assessee up to the last date of the accounting period. He discussed the provisions of section 139(5) and ultimately sus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (All.), Mst. Zulekha Begam (Khatoon) [1981] 129 ITR 560 (Cal.) and O.P. Malthotra v. CIT [1981] 129 ITR 379 (Delhi). It is submitted that the authorities below erred on facts and in law in rejecting the claim of the assessee in respect of the revised return under the circumstances. It is urged, therefore, that the orders of the authorities below may be cancelled and the appeal by the assessee may be allowed. 6. On the other hand, the learned departmental representative supports the order of the authorities below, submitting that admittedly right from the beginning the assessee has adopted a particular method of accounting, i.e., mercantile, and that it is the finding of the ITO as well as of the AAC that the books of account were orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently after one and half years filed the revised return claiming that due to commercial expediency and as the assessee was unable to meet tax liability if the returned income on mercantile basis is considered, found that filing of the revised return was necessitated. Admittedly there is no omission in the return filed originally. Before us not a single item of omission is pointed out. This finding of the lower authorities stands uncontroverted, but, the assessee's learned counsel pointed out that there were wrong statements as the actual and correct income has not been shown in the return. It is explained before us that the assessee originally has shown sales on accrual basis, but it was realised afterwards, that since tax would have to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return or in the mercantile method of accounting regularly followed by the assessee up to the last date of the accounting period which ended or 31-3-1978. These findings of the AAC could not be controverted by the assessee. Filing of return is not a mechanical job as held by the Hon'ble Calcutta High Court in the case of CIT v. Hoosen Kasam Dada (India) Ltd. [1973] 91 ITR 453. The assessee in the present case has not mechanically filed the original return which was filed after recording the transactions in the account books and after observing the necessary formalities and statutory obligations. The Hon'ble Allahabad High Court in the case of New Victoria Mills Ltd., among other things, held that though it is open to the assessee to chang ..... X X X X Extracts X X X X X X X X Extracts X X X X
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