9911796707
TMI Blog1983 (7) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... , and during that raid certain incriminating documents were seized. The ITO, after scrutiny thereof, noticed that certain purchases made on certain dates had not been recorded in its books of account. He further noticed that payment of wages to its employees as per register did not tally with the corresponding entries made in the accounts. Holding that the account books maintained by the assessee were not reliable, and on considering the facts that the Sales Tax Appellate Tribunal had determined the turnover of the assessee for the relevant year as Rs, 23,46,371, the ITO estimated the gross profit of the assessee's firm for the assessment year under consideration at 4% thereof and after deducting the expenditure amount of Rs. 60,677, determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 139(1) says that .......". on an application made in the prescribed manner, the Incometax Officer may, in his discretion, extend the date for furnishing the return, and, notwithstanding that the date is so extended, interest shall be chargeable in accordance with the provisions of sub-section (8)." Section 139(4) says as follows " Any person who has not furnished a return within the time allowed to him under sub-section (1) or sub-section (2) may, before the assessment is made, furnish the return for any previous year at any time before the end of the period specified in clause (b), and the provisions of sub-section (8) shall apply in every such case. " The learned counsel for the assessee contends that, having regard to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es coming under s. 139(4) and that there is no question of blind application of proviso 3 to s. 139(1), in cases covered under s. 139(4). It is also submitted by the Revenue that the interpretation suggested by the assessee will lead to a ridiculous result, in that, in cases where the assessee did not file its return in time, he will be in a better position than the persons who, realising their obligations to file the return, approached the authorities and asked for extension of time and that such unreasonable construction has to be avoided. In support of the said view, the learned counsel for the Revenue relied on the following decisions: 1. Indian Telephone Industries Co-operative Society Ltd. v. ITO [1972] 86 ITR 566 (Mys), 2. Ganes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases where the assessee already applied for extension of time and the ITO has granted the same will amount to doing violence to the language used by the legislature. The incorporation of the entire proviso 3 to sub-s. (1) in sub-s. (4) or the literal application of the entire proviso to cases coming under sub-s. (4) will make no sense. Therefore, the filing of an application for extension of time by the assessee and granting of such extension by the ITO are not conditions precedent for the application of sub-s. (4) of s. 139. Under the provisions of s. 139(4) read with proviso 3 to s. 139(1), an assessee who had not furnished his return within the time mentioned in sub-s. (1) of s. 139 or within the time given to him in the notice under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gislative intention to charge interest in all cases where the returns have not been filed within the prescribed time and that legislative intention can be effectuated only by reading down the proviso to s. 139(1) to suit the case contemplated under s. 139(4) and it is not, therefore, possible to literally apply proviso 3 to s. 139(1), in cases falling under s. 139(4). Another reason is that since the literal application of proviso 3 to s. 139(1) to cases arising under s. 1.39(4) defeats the legislative intention contained in s. 139(4), such a literal application of proviso 3 to s. 139(1) should be avoided. Such a construction of proviso 3 to s. 139(1) in its application to cases arising under s. 139(4) in the manner suggested will lead to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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