M/S MENEZES FERNANDES ENTERPRISES,REP.BY ITS PARTNER SHRI JOSE NICOLAU MENEZES, MARGAO GOA. vs. THE INCOME TAX OFFICER, MARGAO GOA.

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO.13 OF 2006 M/s. Menezes Fernandes Enterprises, A/1, Rohini Apartments, Margao-Goa, represented by its Partner, Sri. Jose Nicolau Menezes, aged about 45, son of later Pedrinho Menezes, r/o A/1, Rohini Apartments, Old Market, Margao-Goa. …. Appellant V e r s u s 1. The Income Tax Officer, Ward-4, Margao, Goa. 2. The Commissioner of Income Tax, Panaji-Goa, Aayakar Bhavan, Patto Plaza, Panaji-Goa. ….. Respondents Mr. Raunaq Rao, Advocate for the Appellant. Mrs. Asha Dessai, Advocate for the Respondents. CORAM: V. M. KANADE & U. V. BAKRE, JJ. DATE : 21ST JANAURY, 2013. ORAL JUDGMENT (PER V. M. KANADE, J ): The appellant is challenging the judgment and order

passed by the ITAT, Panaji, dated 28/12/2005. The appeal was admitted and the following substantial question of law was framed: “Whether the Tribunal was justified in holding that the revised return was invalid in law when the said return was filed before the due date for filing the return u/s. 139 (4) of the Act and it could be deemed as a rectified return u/s. 139 (4) of the Act and not a revised return u/s 139 (5) of the Act? 2. The facts relevant for deciding this appeal are as under: The assessee is a registered partnership firm constituted by the partnership deed dated 2/9/1991. At the relevant time, the due date for filing of the return was 31/8/1993. The assessee filed its return of income on 30/9/1993 and the said return declared an unabsorbed depreciation to the tune of Rs.2,42,996/- for the assessment year 1993-94. Intimation under section 143 (1) (a) was issued on 21.9.1994 and served on the assessee on 24.11.1994. The assessee claimed to have filed a revised return for the purpose of correcting the mistake in its claim by declaring the amount of unabsorbed depreciation as Rs.4,14,345/-. The assessee challenged this intimation under section 143 (1) (a) before the Deputy Commissioner of Income Tax (Appeals), Belgaum. The Dy. Commissioner by its

order dated 23/11/1995 directed the assessing authority to consider the revised return in the light of the judgment of Madhya Pradesh High Court reported in 170 ITR 556 and Calcutta High Court in 137 ITR 722. The Revenue challenged this order and filed a Second Appeal before the Tribunal. Initially the Tribunal passed the order dated 12.12.2002 and set aside the order of the Dy. Commissioner of Income Tax (Appeals) and remanded the matter back to the CIT (A). A review application was filed by the appellant assessee under section 254 seeking rectification of the order dated 12.12.2002.. The Tribunal, however, dismissed the miscellaneous application by judgment and order dated 28/12/2005. Being aggrieved by the order passed by the Tribunal, the assessee has filed this appeal. 3. An application was filed by the appellant seeking leave of the Court to rely on five documents. The said application was allowed and the appellant was permitted to file additional compilation of five documents namely: Deed of Partnership dated 2/9/1991, Certificate of Registration of Firm dated 6/9/19991, Deed of Rectification dated 9/4/1992, Letter dated 28/7/1994 issued by the Income Tax Officer, Ward-4, Margao and the letter dated 20/10/1994 addressed by M/s. Menezes Fernandes Enterprises.

31/10/1989 and which raises a presumption in favour of the revenue. He submitted that even if the said circular was taken into consideration, the benefits of the said circular ought to have been given to the appellant, since admittedly, the order passed under section 143 (1) (a) was not served on the assessee when he filed the rectified return. It was submitted that there was a bonafide mistake on the part of the accountant and the said mistake was sought to be rectified by filing a rectified return. He submitted that it was an admitted position that the said order under section 143 (1) (a) dated 21/9/1994 was not served on the assessee when he filed the rectified return. It was, therefore, submitted that it could not be said that the appellant has filed a revised return. It was contended that the Tribunal therefore had erred at the very outset in treating the rectified return as a revised return. 5. On the other hand, Ms. Dessai, the learned counsel appearing on behalf of the Revenue submitted that the Dy. Commissioner of Income Tax (Appeals), Belgaum, had clearly erred in relying on the judgment of the Madhya Pradesh High Court and of the Calcutta High Court, as those judgments are overruled. She submitted that the finding given by the Dy. Collector of Income Tax

was without reference to the provisions of Section 139 sub clause (5). It was submitted that the appellant had filed the return in September, 1993. It was admittedly after the period of filing the return was over and,as such, in view of the provision of section 139 sub clause (5), the petitioner was not entitled to file the revised return. It was submitted that in case of delay in filing the return, the provision of sub clause (5) was not applicable to such cases which were covered under section 139(4), in view of the fact that section 139 (5) merely was restricted to the return which was filed under section 139 (1) and (2). She invited our attention to the judgment of the Supreme Court in “Jagdish Chandra” (supra). 6. After hearing both the learned counsel at length and the arguments, submissions made by the learned counsel for the appellant cannot be accepted. Before taking into consideration the rival submissions, it is necessary to refer to the relevant provisions and more particularly, the provision of section 139 of the said Act which read as under: “139. Returns of income – (1 ) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during

the previous year exceeded the maximum amount which is not chargeable to Income -Tax shall furnish a return of this income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. (a) In the case of every person whose total income, or the total income of any other person in respect of which he is assessable under this Act, includes any income from business or profession, before the expiry of six months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year, or before the 30th day of June of the assessment year, whichever is later. (b) in the case of every other person before the 30th day of June of the assessment year. (proviso omitted as unnecessary). (2) In the case of any person who, in the Income-tax Officer's opinion, is assessable under this Act, whether

on his own total income or on the total income of any other person during the previous year, the Income-tax officer may, before the end of the relevant assessment year, serve a notice upon him requiring him to furnish, within thirty days from the date of service of the notice, a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. (Proviso omitted as unnecessary). [4 (a) 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 clause (iii) of the proviso to sub-section (1) shall apply in every such case. (Subs. By Finance Act No.19 of 1968, ( w.e.f 1-4-1968)]. ( b) The period referred to in clause (a) shall be- (i) where the return relates to a previous year relevant to any assessment year commencing on or before the 1st

day of April, 1967, four years from the end of such assessment year; (ii) where the return relates to a previous year relevant to the assessment year commencing on the 1st day of April, 1968, three years from the end of the assessment year; (iii) where the return relates to a previous year relevant to any other assessment year, two years from the end of such assessment years.] (5 ) If any person having furnished a return under sub- section (1) or sub-section (2), discovers, any omission or any wrong statement therein, he may furnish a revised return at any time before the assessment is made”. 7. Perusal of the said section as it existed then and more particularly sub clause 5 of the above provision clearly stipulates that it is applicable in respect of applications which are filed under section 139 sub clause 1 and 2. It does not make any reference to a delayed return or a return filed after the stipulated time, as envisaged under section 139 (4).

(1) and (2) and therefore, his case clearly falls within the provision of section 139 (4). Section 139 (5) merely stipulates that it is applicable to any person who has furnished the return under sub sections (1) or (2). In the present case, therefore, if the appellant had filed the return in time, and thereafter had filed a rectified return, he could be

permitted to do so under the said provision. Therefore, from the aforesaid provisions it can be seen that the Legislature in its wisdom had intended to give the benefits of filing a revised return only to those persons who fall within the four corners of section 139 sub sections (1) and (2) of the said Act. If the legislature had intended to also give the same benefits to an assessee who had not furnished the return within time, it would have said so in sub clause (5). The very fact that sub clause 4 is not referred to in sub clause (5) clearly indicates the intention of the legislature. 9. The Apex Court in the case of 'Jagdish Chandra” (supra) has in terms considered this aspect and has held that the said benefits could not be made applicable to a person who does not file his return within the time allotted to him under sub section (1) and sub section (2). The Apex Court in paragraph 11 of the said judgment has observed as under: “The first

question is whether a

person who files

a return under Section 139(1) is entitled to file a revised return before the assessment is made.

think not.

The furnishing of a revised return is

provided by sub-section (5) of

Section 139. According

to this sub-section" any person having furnished a return under sub-section (1) or sub-section (2)" may furnish a revised return at any time before the assessment is made if he discovers any omission or any wrong statement in the original return. The very fact that this right is given to a person who has filed a return under sub-section (1) or sub-section (2) of Section 139 means by necessary implication

that

such a right is denied to a person who files the return under Section 139 (4). The High Court has, however, taken the other view relying upon the language of clause (c) of sub-section (1) of Section 153. Sub- section (1) of Section 153 prescribes the time limits for completing the assessment. In the present case,it is not in dispute, the period allowed for making the assessment is four years from the end of the relevant assessment year as provided by Section 153(1) (a)(i). Section 153 (1)(c) provides an alternate period of limitation. It says that if the assessment is made before "the expiry of one year from the date of the

filing of return or a revised return under sub-section (4) or sub-section (5) of Section 139" it would yet be within limitation notwithstanding the fact that it may be barred under other provisions contained in sub- section(1) of Section 153. The High Court is or the opinion that language employed in clause (c) of Section 153(1) contemplates the filing of a revised return even in a case where original return is filed under sub-section (4). We find

it difficult to agree.

Clause (c) employ both the expressions return and revised return and refers to both the sub-sections (4) and (5) of Section 139. Reasonably read it means the return filed under sub-section (4) and the revised return file under sub-section(5) of Section 139. It would not be

reasonable to construe the said clause as

indirectly conferring a right which is not conferred directly by sub-section (5) of Section

. The High Court has drawn a distinction between a revised return and a rectified return. May be, there is a distinction. We are not concerned here with a rectified return but what was avowedly a revised return and

which was in truth a new return. We find it equally difficult to agree with the rest of the reasoning of the High Court on this aspect. We are, therefore, of the opinion that no revised return can be filed under sub-section (5) of Section 139 in a case where the return is filed under Section 139 (4). Once this is so the revised returns filed by the assessee for both the said assessment years were not valid in law and could not have been treated and acted upon as revised returns contemplated by sub-section (5) of Section

which means that Section 153(1)(c) was not

attracted in this case. Indeed this is the view taken by all the High Courts as conceded by Mr. Ashok Sen. See O. P. Malhotra v. Commissioner of Income Tax (129 I.T.R. 379 Delhi), Dr. S.B.Bhargavav. Commissioner of Income Tax (136 I.T.R. 559 All), Vimal Chand v. Commissioner of Income Tax (155 I.T.R. 593-Raj.) and Eapen Joseph v. Commissioner of Income Tax (168 I.T.R. 26 - Kerala). Only the Calcutta High Court has taken the contrary view with which we are unable

to agree.” 10. Learned counsel for the appellant had urged that the Apex Court had not given any decision on the point of distinction between a revised return and a rectified return. We are unable to accept the said submission. The Apex Court after taking into consideration the view taken by the High Court thereafter had observed that the High Court had drawn a distinction between a revised return and a rectified return and in that context had observed that there may be distinction. The Apex Court, however, clearly has maintained in its conclusion that the rectified return was in fact a new return. It is not possible for us to interpret the judgment of the Supreme Court and come to a conclusion that this point has not been decided by the Apex Court. It is not open for the High Court to interpret the judgment of the Supreme Court. The Apex Court in several cases has deprecated this practice of the High Court in dissecting the judgment of the Apex Court in this manner. 11. Our attention was then invited to the letter written by the Income Tax Officer dated 28/7/1994 wherein he had informed the appellant that he should file a revised return of income declaring

an unabsorbed depreciation of Rs.2,36,546/- and the subsequent reply given by the appellant dated 20/10/1994 in which reference was made to the discussion and also making reference that the appellant was, therefore, arranging to revise the return of the assessment year 1993-94. It was contended that in view of the direction given by the IT Officer, the said rectified return was filed and, therefore, the Tribunal had erred in not taking into consideration the said rectified return. We are unable to accept the said submission. Irrespective of what the IT Officer has observed, in view of the specific provisions of section 139 (5), it is not open for the appellant to either rectify or revise his return after there was a delay in filing a said return in time. Viewed from any angle, therefore, there is no infirmity in the order passed by the ITAT (Appeals). The substantial question of law is accordingly answered. 12. The appeal, therefore, is dismissed. V. M. KANADE, J. U. V. BAKRE, J.

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