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TMI Blog2007 (5) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... -2000. 2. The appeal was admitted for hearing and the following substantial questions of law have been formulated for determination : "(i) Whether the order passed by the Assessing Officer was erroneous and prejudicial to the Revenue inasmuch as the Assessing Officer had accepted the revised computation of income without any revised return filed by the assessee as required under section 139(5) of the Act ? (ii) Whether the revised computation of income could be accepted even after the expiry of time limit to file a revised return as prescribed under section 139(5) of the Act ?" 3. The brief facts are that the assessee filed a income-tax return for the assessment year 1999-2000 on December 31, 1999, declaring income of Rs. 1,60,03,15,698. The said return was processed under section 143(1)(a) on September 8, 2000, and, thereafter, the case was selected for scrutiny. During the course of assessment proceedings, the assessee, vide letter dated December 26, 2001, filed a revised computation of income thereby reducing the income to Rs. 1,33,21,90,698 by claiming further expenses of Rs. 26,81,25,000 on account of additional power cost and other expenses in connection with fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the revised computation of income without any revised return filed by the assessee as required under section 139(5) of the Act. The revised return under the law can only be filed within the period of one year after the expiry of assessment year and the assessee being unable to revise the return since the limitation period has expired, filed the revised computation of income which was nothing but the revision of the return of income. 12. The order passed by the Tribunal is contrary to law since it allowed the assessee to do indirectly what he could not do directly. Furthermore acceptance of revised computation of income beyond the period of limitation as prescribed under section 139(5) of the Act makes this provision redundant. The assessee-company did not furnish revised return of income since revised return as contemplated under section 139(5) of the Act should be in the proper and prescribed form and it should be duly signed and verified by a competent authority. It is also contended that it can be filed any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. The additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the revised return. 15. Return of income in this case was filed on December 31, 1999. It was processed under section 143(1)(a) of the Act, vide intimation dated September 8, 2000, wherein the returned income was accepted as such. Thereafter, notice under section 143(2) of the Act were issued within the prescribed period. The assessee submitted a revised computation of assessable income, vide its letter dated December 26, 2001, which was further amended, vide their letter dated March 19, 2002. 16. As per the Tribunal's order, the Commissioner of Income-tax (Appeals) has not disputed this fact that the Assessing Officer has reached at the conclusion after considering the relevant facts and evidences and the assessment has been framed after making due and proper inquiry. The Commissioner of Income-tax has not shown any disagreement on the allowability of deduction legally to the assessee and no fault have been found in the action of the Assessing Officer in this respect. The main objection of the Commissioner of Income-tax (Appeals) is that the claim made by the assessee through his letter dated September 26, 2001, during the assessment proceedings was beyond the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier : Provided that where the return relates to the previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year." 21. Section 139(5), in terms, empowers only those assessees who have furnished returns, i.e., under section 139(1) or under section 139(2) or in pursuance of a notice issued under section 142(1), to furnish a revised return if the assessee discovers any omission or any wrong statement in the originally filed return. Such a revised return can be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. 22. The filing of the revised return after discovery of omission or wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of orders prejudicial to Revenue.—( 1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. . . ." 27. A bare reading of this provision makes it clear that the prerequisite to the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous ; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent—if the order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total taxable income at Rs. 1,33,21,90,698 considering the additional expenditure of Rs. 26,81,25,000. 30. As per the assessment order passed by the Assessing Officer, an amount of Rs. 7,81,50,000 has been claimed as deferred revenue expenditure by the assessee. The company submitted a revised computation of assessable income, vide its letter dated December 26, 2001 and the assessee also submitted the details of revised deferred revenue expenditure, vide their letter dated February 15, 2002. It was clarified during the hearing that additional expenditure towards the power cost and other miscellaneous expenses incurred during the year amounted to Rs. 33,51,56,000 which was charged to deferred revenue expenses. Further, one-fifth of this amount, i.e., Rs. 6,70,31,000 was deducted being already amortised during the year and the balance amount claimed in the revised computation comes to Rs. 26,81,25,000. Further, the assessee had submitted full details of the expenses incurred for the failure of transmission tower which consisted of Rs. 32,22,21,000 paid to the Madhya Pradesh State Electricity Board towards additional power consumed ; Rs. 54,98,608 towards the cost of additional ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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