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TMI Blog1999 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income belatedly, the belated return of income was regularised by the Income-tax Officer by the issue of a notice under section 148 of the Act, and the assessee's returned income of Rs. 1,45,790 was accepted and the assessment was also completed on the basis of the returned income without making any further addition to the returned income. The assessee filed along with its belated return a declaration in Form No. 12, and claimed the benefit of continuation of registration of the firm. The assessee explained the delay in filing the return of income and the declaration stating that its chartered accountant, who was looking after the finalisation of its accounts, has left the practice abruptly and settled abroad. It was also stated that one of its partners, who was looking after the affairs of the firm, also retired during the financial year 1991-92 and the accountant in charge of the firm died due to sudden illness. The Income-tax Officer carefully examined each one of the reasons given by the assessee and held that the reasons given by the assessee would not be regarded as sufficient cause for the delay in filing the declaration. He held that the demise of the accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT [1997] 226 ITR 907 would apply wherein the Madhya Pradesh High Court applied the circular of the CBDT dated June 26, 1965, and held that where the filing of the return was delayed and where the Income-tax Officer has not made ex parte assessment under section 144 of the Act, the declaration filed in Form No. 12 along with the return would be taken as sufficient compliance with the provisions of section 184(7) of the Act and the renewal of registration should be granted. Mr. C. V. Rajan, learned junior standing counsel for the income-tax, submitted that under section 184(7) of the Act, the assessee should have furnished the declaration within the time prescribed under section 139(1) of the Act, and if the Assessing Officer was satisfied that the filing of Form No. 12 was delayed and if it was established that it was prevented by sufficient cause from the filing of the return within the time prescribed under section 139(1) of the Act, it is open to him to furnish the declaration at any time before the assessment is made. Learned counsel for the respondents submitted that the Commissioner of Income-tax has held that the reasons given by the assessee are not sufficient to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 139(1) of the Act. On the facts of the case, the assessment year is 1991-92 and the due date for filing the return was August 31, 1991, but the return was filed on September 26, 1994. Undoubtedly, there was a delay in filing the return and the Income-tax Officer issued a notice on August 21, 1995, under section 148 of the Act and regularised the return. I am of the view that in the absence of the notice under section 148 of the Act, the return would have been treated not as a valid return, However, when the belated return filed was regularised by the Income-tax Officer by the issue of notice under section 148 of the Act, I hold that the return is a valid return and it is only on the basis of that the return filed was a valid return, the assessment was completed. I hold that once the return filed is treated as a valid return, it should be treated as a valid return for all purposes of the Act. In this context, the circular of the Central Board of Direct Taxes dated June 26, 1965, is relevant and the said circular reads as under : "Income-tax Act, 1961---Renewal of registration-Filing of declaration, under section 184(7).-A declaration under section 184(7) of the Income-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns mentioned therein should be strictly construed and fully complied with. A fair reading of the circular shows that it intends to give certain benefits to the assessee. The view of the Commissioner that the circular would apply only in case where the return was filed under section 139(4) of the Act is a narrow view to take on the construction of the circular. I agree with Mr. C. V. Rajan, learned counsel for the Revenue, that the circular should not be construed as a statute, but that does not mean that the court should not examine the circular in its entirety and give a reasonable construction and provide a natural meaning to the words found in the circular. The circular does not say that it would only apply to a return filed under section 139(4) of the Act, as the expression employed in the circular is that it would apply to a belated return. The cause for the delay may vary and the circular is not restricted to a return filed under section 139(4) and the natural expression employed "belated return" is fairly wide enough to encompass the belated return filed in pursuance of a notice under section 148 of the Act as well. Moreover, if the view of the Revenue that the circular - wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 184(7) of the Act, but merely states that if the twin requirements mentioned in the circular are satisfied, the Income-tax Officer would be well advised to treat the belated declaration as a valid declaration and not to reject the same on grounds of delay. I, therefore, hold that if the two conditions prescribed by the Board are satisfied, the assessee would be entitled to the benefit of the circular, irrespective of the nature of the return, whether it is a return filed under section 139(4) or a return filed under section 148 of the Act. I hold that the view of the Commissioner that the return is not a valid return is not acceptable, as the return filed was regularised by the issue of notice under section 148 of the Act, and once it is taken to be a valid return, the return filed is a valid return not only for the purpose of assessment, but it would be valid for all purposes of the Act including for the purpose of continuation of registration under section 184(7) of the Act. I agree with the decision of the Madhya Pradesh High Court in Mukunchand Baid's case [1997] 226 ITR 907, and hold that the circular of the Central Board of Direct Taxes dated June 26, 1965, would apply ..... X X X X Extracts X X X X X X X X Extracts X X X X
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