Judgment:
ORDER
Per Shri M. C. Agarwal, Judicial Member - This is an appeal by the revenue against an order dated 28-2-1985 passed by the Appellate Asstt. Commissioner cancelling the assesseds assessment for asstt. year 1978-79 on the ground that it had been made after the expiry of the period of limitation. Though there were other grounds also in the appeal, the learned AAC did not decide them. The assessed has, thereforee, filed a cross-objection urging that the AAC should have decided those grounds as well.
2. We have heard the learned departmental Representative and the learned counsel for the assessed. The facts are that the assesseds return of income was due to be filed on 30-7-1978 u/s 139(1) of the Income-tax Act, 1961. No return was filed within that time. The assessed filed a return of income on 30th August, 1978. The assessed filed a revised return on 17-2-1981 and the ITO completed the assessment on 15-2-1982. Before the AAC it was contended that the return filed on 17-2-1981 was not an invalid return as a revised return could not be filled in respect of a return filed u/s. 139(4) and, thereforee, this return could not be taken into account and could not extend the period of limitation. The assessment should, thereforee, have been completed within the ordinary period of limitation which expired on 31-3-1981. The learned AAC accepted this contention purporting to follow the law as laid down by the Honble Delhi High Court in O. P. Malhotra v. CIT : [1981]129ITR379(Delhi) and the Allahabad High Court in the case of Dr. S. B. Bhargava v. CIT : [1982]136ITR559(All) .
3. At the hearing before us the learned Departmental Representative contended that the learned AAC has misapplied the aforesaid ruling and they are actually in favor of the revenue. The learned counsel for the assessed, on the other hand, relied upon the aforesaid judgment of a Special Bench of this Tribunal in ITO v. Bohra Film Finance [1983] 3 SOT 294 (Jp.).
4. We have given our careful consideration to the respective arguments. An assessed is obliged to file a return u/s. 139 (1) within the period prescribed therein. Then u/s. 139(2) an assessed has to file a return within the period prescribed in the notice served by the ITO on him for that purpose. It was contended on behalf of the assessed that if a return is not filed within the period prescribed u/s. 139(1) or section 139(2) then it is not a return under those sections. According to the learned counsel for the assessed any return filed by an assessed after the expiry of the periods prescribed in the aforesaid sub-sections would be a return filed u/s. 139(4). According to the learned counsel for the assessed under sub-section (5) of section 139 only a return filed under sub-sections (1) and (2) can be revised and no revised return can be filed in respect of a return filed u/s. 139(5) but he contended that such a return could be revised under the provisions of section 139(4) itself and for this proposal he relied upon the ratio of O. P. Malhotras case (supra) decided by the Delhi High Court which is the jurisdiction at High Court.
5. Before discussing the ratio laid down in the aforesaid case it is better to keep in mind the difference in the provisions of sub-sections (4) and (5). Under section 139(4) (a) an assessed can file a return only within the period prescribed in the following clause (b). That period available in the present case was two years from the end of assessment year, i.e., up to 31-3-1981 in the case before us. Under sub-section (5) revise d return can be filed at any time before the assessment is made. Here the things worth noting are that under sub-section (5) only a revised return is permissible. In other words, no return can be filed under sub-section (5) unless there is already in existence a return filed under sub-section (1) or (2). Sub-section (4) on the other hand contemplates a return when no return under sub-section (1) or (2) has been filed. Further, under sub-section (5) a revised return can be filed even beyond the periods mentioned in section 139(4) (a) and (b.) In sub-section (5), the words used are 'before the assessment is made ' and in certain contingencies an assessment can be made in an extended period, one of which is the filing of a revised return which in some cases extends the period of limitation prescribed for the completion of the assessment.
6. In O. P. Malhotras case (supra) the assessment year involved is 1960-61 and the assessed had filed a return on 30th March, 1965. On March 28, 1966 the assessed filed a revised return. The ITO made an assessment treating the revised return filed on 28th March, 1966 as invalid as the return filed on March 30, 1965 had not been filed under sub-section (1) or (2) of section 139. On appeal, the AAC held that the return filed on 28-3-1966 was a valid return and he directed the ITO to complete the assessment a fresh on the basis of the revised return. On a further appeal, it was held by the Tribunal that the subsequent return could not be treated as a revised return under sub-section (1) or (2) of section 139. The Tribunal held that the ITO rightly ignored the second return. The Honble Delhi High Court affirmed the Tribunals view that a return filed on 30th March, 1965 being one u/s 139(4), a revised return could not be filed u/s 139(5), and the return filed on 28th March, 1966 was invalid in law but at page 386 of the report the Honble High Court observed as under :
'But where a person has not filed such a return and is availing himself of provisions of sub-section (4) which enable him to file a return after a delay which might extend up to four years, it could well be that the Legislature thought that no such opportunity of revision was needed to be provided for. In this context, it should be remembered that such an assessed can within the period of four years provided for in section 139(4) (which has been reduced subsequently to two years conformably to amendments in section 153 reducing the time limit for completion of assessment) file as many returns as he wants. In view of this also, there was no necessity to provide a further opportunity to such an assessed to revise a return filed already after considerable delay by taking advantage of the fact that the assessment has not been completed by then. On these considerations, we are not be impressed by the argument of Shri Verma that it would not be logical to hold that a person who has originally filed a return could revise it as many times as he likes before the assessment is made but that such an opportunity would not be available to a person who files his first return only u/s. 139(4) '.
These observations clearly indicate that a return filed u/s. 139(4) can be revised under section 139(4) itself within the time prescribed in section 139(4) (b). In the case of Bohra Film Finance (supra) also decided by a Special Bench of this Tribunal it has been held that successive returns could be filed u/s. 139(4) itself within the period of limitation.
7. In the case before us as already pointed out the ordinary period of limitation for the completion of the assessment was to expire on 31-3-1981. The original return was filed on 30th August, 1978 while a revised return was filed on 17-2-1981, i.e. before 31-3-1981. The second return was thus a revised return within the time allowed by section 139(4) and was thus a valid return or a revised return filed under the sub-section. We have now to see what is the effect of filing a second return which revised the income already returned. Section 153 prescribes the time limit for completion of assessments and reassessments. Sub-clause (c) of section 153(1) permits an assessments to be made up to 'the expiry of one year from the date of the filing of a return or a revised return under sub-section (4) or sub-section (5) of section 139'. In the case before us the second return was filed on 17-2-1981 and the assessment that was made on 15-2-1982 is within a period of one year from the filing of the second return. In the rulings referred to above there is nothing to indicate that sub-clause (c) of section 153(1) does not take into account a second or a revised return filed u/s. 139(4). The language used in sub-clause (c) has already been reproduced. Interpreted property this clause should read as under :
'the expiry of one year from the date of the filling of a return or a revised return under sub-section (4) or the expiry of one year from the date of filing of revised return under sub-section (5) of section 139.'
and not as below :
'the expiry of one year from the date of the filing of a return under sub-section (4) or a revised return under sub-section (5) of section 139.'
8. Since under sub-section (4), a return can be filed and thereafter a revised return also be filed the words 'revised return' would not refer to sub-section (5) alone. In our view, this is the only interpretation possible and no contrary interpretation was shown to have taken anywhere.
9. It is important to note that in the case of O. P. Malhotra (supra) the return was filed on the 30th March, 1965 when the limitation for the assessment was to expire on 31-3-1965. How could a proper assessment be made within such a short time The Legislature was alive to such a situation and that is why they enacted the provisions of sub-clause (c). It is only because of sub-clause (c) that in that case even though the second return was held to be invalid the assessment made on 29th March, 1966, i.e. within one year of the return dated 30th March 1965 was not cancelled by the Tribunal and this was upheld by the Honble High Court. We agree with the learned Departmental Representative that in fact O. P. Malhotras case (supra) is in favor of the revenue and does not support the assesseds. The assessed perhaps relied upon the this case because in the head note it is stated that a return filed u/s. 139(4) could not be revised u/s. 139(5). The head note did not mention that a return filed u/s 139 (4) could be revised u/s 139(4) itself.
10. In Bohra Film Finances case (supra) also the assessed had filed the revised return after the expiry of the period of limitation and it was that reason that it could not extend the period of limitation. In that case the assessment year involved was 1970-71. The assessed filed its return after the periods prescribed u/s 139(1) and 139(2) on 20-1-1973. The period of limitation for the assessments was to expire on 31-3-1973. The assessed filed another return on 15-1-1974 purporting to be a revised return. The assessment was completed on 24-7-1974. The revised return was thus patently not a return u/s. 139(4). It was also not a return under sub-section (5) as the return that was sought to be revised was not a return under sub-section 139(1) or (2). In that case the assessment had been completed by the ITo on 24-7-1974 i.e. more than one year after the filing of the first return and was, thereforee patently barred by limitation. The second return was of no avail to the revenue as it was not a return u/s. 139(5) and was not filed within the time allowed by section 139(4). In the circumstances of the case, the Special Bench was not required to express any opinion as to whether a second return filed under sub-section (4) of section 139, whether we call it a revised return or not, would extend the period of limitation for the completion of the assessment by one year in terms of section 153(1) (c) and the Special Bench order is silent on the point. However, since the Special Bench has held that a return filed u/s. 139(4) can be revised as many time as the assessed may like, of course, within the period prescribed u/s 139(4) (b), it has necessarily to follow that the ITO will get the benefit of extension under sub-section (c) otherwise it would be incongruous that an assessed may choose to file a return shortly before the period of limitation was to expire as was done in the case of O. P. Malhotra (supra), giving the ITO no time to consider the revised return.
11. For the reasons discussed above, we are of the opinion that in the present case the revised return was filed within the time prescribed u/s 139(4) (b), it was a valid return and would extend the period of limitation for the completion of assessment in terms of section 153(1) (c) and the assessment was made by the ITo within such extended period of limitation. The assessment made by the ITO, thereforee, was not invalid on that account. As already mentioned the learned AAC has not disposed of the other grounds raised in the appeal before him and his order under appeal has to be reversed. The matter will, thereforee have to go back to the learned AAC for disposal of the other grounds raised in the assesseds appeal.
12. The revenues appeal is thereforee, allowed. The order under appeal is cancelled and the learned AAC is directed to re-hear the assesseds appeal on other grounds and dispose them off on merits. The cross-objection is sustained.