9911796707
TMI Blog1974 (7) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... 22, or s. 212(3) of the I.T. Act, 1961, for the same assessment year. The appellant argued only two points before the trial court. Firstly, that s. 22(3) of the Indian I.T. Act, 1922, is nothing but a proviso to s. 22(1)/22(2) of the said Act and as such if the return is filed before the assessment is complete then it cannot be said that the return is filed out of time. The said contention was advanced on the basis of the Supreme Court decision in CIT v. Kulu Valley Transport Co. P. Ltd. [1970] 77 ITR 518 (SC) and S.C. Prashar v. Vasantsen Dwarkadas [1963] 49 ITR 1 (SC). The second point urged was that if the penal interest was levied under s. 139 of the I.T. Act, 1961, the respondents cannot initiate proceeding under s. 271 for penalty inasmuch as it would amount to double jeopardy. It is an admitted position in this case that the appellant filed the return for the assessment year 1963-64 on the 23rd of May, 1967, and thereafter a revised return was filed on the 14th of September, 1967. It is also admitted that the ITO has imposed interest for the said assessment year amounting to Rs. 87,020 under s. 139(1)(b), proviso to cl. (iii), and Rs. 510 under s. 215 of the said Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-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 four assessment years from the end of the assessment year to which the return relates and the provisions of sub-clause (iii) of the proviso to sub-section (1) shall apply in every such case." "271. Failure to furnish returns, comply with notices, concealment of income, etc.-(1) If the Income-tax Officer or the Appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that any person- (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 139 or by such notice, as the case may be, or ...... he may direct that such person shall pay by way of penalty,- . . .........." Dr. Debi Pal submitted that on an analysis of cl. (iii) of the proviso to section 139(1) it is clear that- (a) The ITO has the power and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be necessary. The procedural part of making an application in the prescribed manner cannot apply when the case falls under s. 139(4). Therefore, Dr. Pal submits, the ITO will exercise his substantive power given under the proviso to s. 139(1) of extending the date for furnishing the return on payment of interest without any application being made in the prescribed manner. On the basis of the above argument Dr. Pal submits that the said notices are bad in law and should have been quashed and set aside as asked for in the writ petition by the appellant by the trial court. Dr. Pal further contends that none of the decisions cited by Mr. Balai Pal appearing for the respondents have considered the question from the aspect which has been submitted by Dr. Pal and as such cannot be said to have been correctly decided. Dr. Pal relies on the well-settled principles of construction of taxing statutes that when the provision is ambiguous and is capable of two meanings, the construction beneficial to the citizen should be adopted. He relies on the Division Bench decision of this court in CIT v. Vegetable Products Ltd. [1971] 80 ITR 14 (Cal), which was affirmed by the Supreme Court in [1973 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction sought to be put by Dr. Debi Pal on the said sections was not permissible and had been rejected by overwhelming judicial decisions of the said three High Courts referred to by him. Therefore, Mr. Pal submitted that the appeal should be dismissed. Considering the contentions of both the parties carefully, it appears to us that the interpretation sought to be put on the said s. 139(1), prov. (iii) thereto and s. 139(4), by Dr. Pal is not possible as that would go directly against the clear unambiguous wordings and intention of the said section. The decision of the Gujarat High Court in Addl. CIT v. Santosh Industries [1974] 93 ITR 563 (Guj) has covered the question raised by Dr. Pal, although not in that specific form in which Dr. Pal sought to raise before us. In the said decision of the Gujarat High Court [1974] 93 ITR 563 at 566, Bhagwati C.J. formulated the question raised before the Bench as follows : "We will, therefore, proceed to discuss the question before us on the basis that the assessee failed to furnish the return within the time allowed to it under section 139, sub-section (1), but furnished it thereafter, within four years from the end of the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The classic statement of Rowlatt J. in Cape Brandy Syndicate v. IRC [ 1921 ] 1 KB 64 at page 71 still holds the field. It reads: '. ...... In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, one can only look fairly at the language used.' To this may be added a rider: in a case of reasonable doubt the construction most beneficial to the subject is to be adopted. But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. 'The underlying principle is that the meaning and intention of a statute must be collected from the plain and unambiguous expression used therein rather than from any notions which may be entertained by the court as to what is just or expedient.' The expressed intention must guide the court. Another rule of construction which is relevant to the present enquiry is expressed in the maxim, generalia specialibus non derogant, which means that when there is a conflict between a general and a special provision, the latter shall prevail. The said princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y considerations of hardship or business convenience, or the like'. The burden is however of course on the Crown to show that the subject is within the provisions of the Act." We with great respect also agree with the words of caution of Bhagwati C.J. sounded in the said Gujarat High Court decision in Addl. CIT v. Santosh Industries [1974] 93 ITR 563 (Guj) at page 569 quoting the celebrated passage of Warrington L.J. in Barrell v. Fordree [1932] AC 676 at 682 (HL) which are as follows: "The safer and more correct course of dealing with a question of construction is to take the words themselves and arrive, if possible, at their meaning without, in the first place, reference to cases." Keeping these principles in mind, if we now examine the provisions of s. 139 of the I.T. Act, 1961, it would appear that it is the first section in Chap. XIV of the I.T. Act, 1961, under the heading " Procedure for assessment ". In sub-s. (1) it provides that any one who has an assessable income has to furnish a return of his income in the prescribed form and in the prescribed manner within the specified time mentioned in cl. (1), sub-cls. (a) and (b), as the case may be. The said initial period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (iii) of s. 139(1) and proviso to sub-s. (2) of s. 139. It may be noted that the said proviso to sub-s. (2) of s. 139 also contemplates extension of time beyond the original period of 30 days fixed by the notice served by the ITO under sub-s. (2) of s. 139. The wordings are : "Provided that on an application made in the prescribed manner, the Income-tax Officer may, in his discretion, extend the date for the furnishing of the return, and when the date for furnishing the return, whether fixed originally or on extension, falls beyond the 30th day of September, or, as the case may be, the 31 st day of December of the assessment year, the provisions of sub-clause (iii) of the proviso to sub-section (1) shall apply. "It is clear from the said two sub-sections, that is, sub-ss. (1) and (2) of s. 139, after the initial period within which the return can be furnished by the assessee, the ITO has a discretion to extend the time on the application of the assessee in the prescribed manner for a period without charging interest and it is mandatory for the ITO to charge interest if the extension is beyond the periods provided in the said sub-sections. Now, if the wordings of sub-s, (4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication by the ITO either under the proviso to sub-s. (1) of s. 139 or under the proviso to sub-s. (2) of s. 139, he can immediately or within the prescribed period of four years, file his return under s. 139(4) of the I.T. Act paying interest and thereby assume a position as if the ITO has granted him extension of time although in fact it has been rejected. That seems to be an absurdity and renders prov. (iii) to sub-s. (1) of s. 139 redundant and nugatory. Further, from the scheme of the said s. 139(1), (2) and (4) it is quite clear that the assessee is given, firstly, a statutory period for filing his return either voluntarily or on being served with a notice by the ITO under sub-s. (2) of s. 139 and thereafter further time can be granted by the ITO on the application of the assessee in the prescribed manner without charging interest and thereafter interest must be charged if the time is extended by the ITO on the application of the assessee in the prescribed manner beyond the specified period. Whereas in sub-s. (4) of s. 139 an assessee who has not furnished his return within sub-s. (1) or sub-s. (2) of s. 139 has a further statutory right to file his return within four years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making an application before the ITO in the prescribed manner. That is an absurdity which is not warranted by the wordings of the said sections and such an interpretation would render the provision of sub-s. (1) or sub-s. (2) for extension of time beyond the specified period on the application of the assessee in the prescribed manner by the ITO at his discretion wholly unnecessary. And that interpretation would give a right to an assessee to file his return at any time within the four years as prescribed under sub-s. (4) of s. 139 by payment of interest only, as if the time has been allowed by the ITO although there was no application for the same in the prescribed manner or such an application has been rejected by the ITO exercising his discretionary power. Therefore, such a construction is not warranted by the wordings and the scheme of the said sub-ss. (1), (2) and (4) of s. 139 of the I.T. Act, 1961. The only interpretation possible is that an assessee, who has not filed his return within the time allowed either originally or within the extensions under sub-s. (1) or sub-s. (2) of s. 139 is given a statutory period of four years to file his return and imposition of interest as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f s. 271 of the I.T. Act, 1961, that the appellant, prima facie, comes within the said provision as it has not filed its return as required under sub-s. (1) of s. 139 of the I.T. Act and as such the respondents had jurisdiction to issue the said notices which are challenged in the writ petition. In that view of the matter there is no merit or substance in the contentions of the appellant. We also agree with the decision of the Division Bench of the Gujarat High Court in Addl. CIT v. Santosh Industries [1974] 93 ITR 563, referred to earlier, where after considering all other relevant decisions, Bhagwati C.J. finally concluded and observed at page 581 of the said report as follows: "We must interpret the language employed by the legislature in its contextual setting having regard to the purpose which the legislature had in mind and, if we do so, it is clear that the second clause of section 271(1)(a) applies where a person fails to furnish a return of income within the time allowed strictly under sub-section (1) or sub-section (2) of section 139 and filing of return after the expiration of such time but before the expiration of four years from the end of the assessment year und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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